SEMA eNews Vol. 13, No. 23, June 10, 2010

Luxury Car Sales Spur Chinese Demand for Performance Products and Dynos

  chinese
  Luxury car sales in China are rising, which should help boost demand for performance dynamometers.

The market for performance dynamometers in China is modest at the moment, reflecting the newness of the country’s performance car culture. But China is a market to watch, said companies making the high-tech tuning machines. One thing that should boost demand for dynos in China is the fast growth in luxury car sales. Luxury car buyers want, and can afford, performance-boosting products for their car. Tuner shops will need dynos to guarantee top performance. Dyno manufacturers are betting on the market growing and are actively signing up distributors to supply these new potential customers.

Dyno manufacturers figure getting more aftermarket performance products on the market in China will also help boost demand for dynos. “Our product depends on other performance products being successful (in China),” said Steve Nichols, president of DYNO Dynamics USA.

The fast-growing luxury car segment is currently the most promising area in China for stimulating dyno demand. Sales of luxury cars rose by 29% in 2009 to 310,000 units, according to J.D. Power and Associates.

Among the top-selling models: the Lexus ES series, BMW 7 series and Mercedes S-Class, all imports. Domestically produced Mercedes, BMW, Audi and Volvo models were also in the top 10.

The demand for luxury models in China belies the nation’s modest income levels. An imported Lexus ES starts at around (USD) $71,600 in China at current exchange rates, according to J.D. Power and Associates. Yet more than 18,500 were sold in China in 2009. The top-selling luxury model in China, the domestically produced Audi 6L, starts at around (USD) $60,000. The “L” denotes that it is a special stretch version produced only in China. More than 106,000 were sold in 2009. And China is the largest market in the world for the imported Mercedes S-Class sedan, which starts at more than (USD) $136,000. More than 13,400 were sold in China in 2009.

Luxury cars are the most likely candidates for dyno-tuning in China, said Dave Ganzhorn, vice president of sales at Mustang Dynamometer of Twinsburg, Ohio. Luxury car owners are the clients for the dynos his company sells in Hong Kong, next to south China’s Guangdong province, he said.

Ganzhorn and Nichols both see growth in the dyno market in China taking some time to really take off and generate the quantity of sales experienced in markets such as the United States. But China has a way of defying expectations. After all, its vehicle market became the world’s largest in 2009, ahead of most analysts’ predictions. Individuals in China only began to buy cars in large numbers in 2002. In any case, Nichols figures the China market is “definitely one to keep an eye on.”

For more information on the China market, contact Linda Spencer at lindas@sema.org or visit www.sema.org/china.