Bentley and Isuzu distributor in China, Dah Chong Hong Holdings, is eyeing setting up a chain of car service centres to tap expected increased demand – and a lack of opposition – as car ownership soars.
The unit of China backed CITIC Pacific is planning a pilot scheme for its newly planned independent motor services outlets to provide vehicle maintenance services, and it was also looking into the retail business, CEO Donald Yip told Reuters.
Yip said the company aimed to expand its motor related business, including leasing and repairing and maintenance services, in China as he expected to see increasing demand for maintenance services after car sales boomed in recent years.
“These are the areas that we see good potential in China because the number of cars sold in the last few years was so big that gradually these cars will come up through the aftermarket [requiring] maintenance,” Yip told Reuters.
“Today there are no reputable chain stores in China,” Yip said. “People may not be able to easily get a good [aftersales] provider. That is why we are trying to fill the gap.”
Dah Chong Hong also sees strong growth in high end luxury cars, including Bentley, continuing in China.
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“People are still wealthy. Today, the volume is still not big even though we have doubled (sales) in the last few years,” he said. The company sold 400 Bentleys in 2009, 800 in 2010 and it aims to sell 1,200 in 2011.
Dah Chong Hong, which recorded a 65.7% rise in unit sales to 623 Bentleys in the first half of 2011, aims to secure two more premium brands this year, adding to its existing brands including Audi, Acura, Nissan and Isuzu.
Isuzu commercial vehicles recorded 11.6% growth in unit sales in China during the first half.
Last week, Dah Chong Hong posted a 63.5% year on year rise in net profit to HK$801m for the first half of 2011, with turnover rising 39.6% to HK$19.8bn.
China’s contribution, which accounted for 72.8% of the turnover during the six-month period, is seen increasing to about 80% by the end of next year, Yip said.
The company operates 59 dealerships in China and has secured an additional 11 dealerships. It said its motor vehicle sales in mainland China increased 48.2% to 36,122 units due to rising demand for mid- to high-end cars in China.
The firm is also active in consumer and food product distribution and is eyeing expanding into retail.