The Rising Influence of Rising Affluence

[DewDiligence]

… Jaguar Land Rover, as the [Tata Motors] unit is now known, began showcasing its newest and smallest model, the $44,000 Range Rover Evoque, at motor shows around the world… The car's relatively small size makes it ideal for the congested roads of China, whose auto boom is driving Tata. Demand for luxury cars there ballooned to more than 750,000 units last year, and could more than double by 2015, as more of the nation's huge population becomes affluent.

The "luxury-car market in China is red-hot, and profit margins of BMW or Jaguar Land Rover are far higher in China than in any other market in the world," says Michael Dunne, a veteran auto analyst with Dunne & Co. in Hong Kong. "In China, the propensity to spend on cars goes way beyond function. Affluent Chinese are buying cars principally to project their social status, not just as a mode of transport. Over 90% of the people buying luxury cars in China are paying cash."

http://online.barrons.com/article/SB50001424053111903937204576375460327084194.html