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Cracking the luxury car market

Friday, Mar 11, 2005, Page 10

Land Rover Taiwan's general manager, Martin Baker, stands beside the new luxury sport utility vehicle, Discovery 3, yesterday in Taipei. The vehicle rolled out yesterday and, priced at NT$3.25 million, hopes to tap into the difficult premium auto market. PHOTO: AMBER CHUNG, TAIPEI TIMES

Taipei Times: Taiwan's luxury sport utility vehicle (LSUV) market segment has been growing fast in the past few years. How do you see the market progressing?

Martin Baker: The LSUV market started around four years ago and continued to expand to last year, when the sector saw very fast growth driven by numbers of new entrants. We have seen people keep buying in the past four years. The sale volume of the LSUVs priced over NT$2 million (US$65,000) reached between 7,000 units and 8,000 units last year, accounting for nearly 2 percent of the nation's total auto market.

The market will keep growing but the momentum this year may not be as strong as last year, due to less rollout of new models in the meantime. In addition, the four-year replacement cycle is expected to happen this year and some LSUV owners may think about switching their cars to sedans, which may well slow down the growth.

TT: Would decelerating market growth constrain Land Rover's development for this year?

Baker: I am not too worried about this, as we think Land Rover is in a good position. Our products well suit Taiwanese consumers who like crossover sedans -- sedans a bit higher than the normal. With the launch of a brand new model, we expect sales to increase by 20 percent to 30 percent this year from 562 vehicles last year, which also grew 30 percent from 435 units in 2003.

TT: Taiwanese people are not strongly into outdoor activities and favor sedans. Was Taiwan a difficult market for Land Rover to break into two years ago?

Baker: Yes, Taiwan is a hard market for us to enter in the Asian region, especially as Land Rover was not known in the market back then. Taiwan, unlike other Asian countries such as Malaysia and Thailand where more British people lived and saw more British involvement in their history, has much less British influence.

Fortunately, Taiwanese people are becoming more global and more European, which provides a better opportunity for us to build up our brand.

TT: Since you are not as well-known as competitors Lexus, Mercedes-Benz and BMW, how do you address the challenge of business expansion?

Baker: We are indeed not so well-known to local consumers -- compared with Mercedes-Benz or BMW who have ploughed the market for 30 years -- and need to work harder on strengthening our brand. It is a job that takes time.

We have budgeted over US$3 million for marketing expenditure in Taiwan this year on television commercials and a variety of promotional events in a bid to further raise our brand awareness.

Our dealer network built over the past two years is helpful and, as a matter of fact, our customers are the best salespeople, especially after more and more Land Rover vehicles are on the road right now.

We hope the rollout of the new car, whose price tag is actually lower than our pricing in the rest of the world, could help move the brand a long way forward. A new model offering high value with less cost is part of our strategy to draw more auto buyers and build up brand awareness.
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