Steering toward luxury cars

It's Tomb Sweeping Day and Wang Bao-hua (王保華) and his wife had just returned from paying their respects at his father's cemetery and decided to stop at their local BMW dealership in Taipei.

"We have two daughters whose college educations are now paid for," Wang said. "Now we can finally spend some money on ourselves.

"We've driven Toyotas for years, but, when we got married we said we'd work hard to afford a comfortable retirement. So I'm here to show my wife how comfortable a BMW is!" he said with a laugh.

Like the Wang family, an increasing number of Taiwanese are looking to make the jump to a luxury car when they purchase their next vehicle. And like the majority of Taiwanese who do, they're looking at BMW and Mercedes-Benz models.

It's a prospect that thrills Huang Bang-chi (黃邦旗), the BMW representative with whom Wang and his wife have been talking.

Huang estimates that BMW Group, which sells both its flagship fleet of cars as well as Mini Cooper models, sold about 5,000 cars in Taiwan last year.

"Our sales have gotten better every year," he said.

Indeed they have. According to statistics compiled by the Taiwan Transportation Vehicle Manufacturers Association, the local car market experienced 16.7 percent growth in 2004 over the previous year. While the market for luxury automobiles remains at 7 percent of the total market, that number has grown incrementally for several years, and even continued to rise during the Asian financial crisis.

There are other indicators -- or at least a lot of optimism -- that the market will continue to grow. In 2002, four years after the two auto manufacturers merged, DaimlerChrysler established a local subsidiary to sell its Mercedes-Benz fleet of cars, infusing it with NT$1.7 billion in capital. The company now has 25 showrooms throughout the island and claims to sell an average of 7,000 cars per year. Their best has been 10,000 units in a single year.

By comparison, DaimlerChrysler Taiwan claims to sell some 500 Jeeps and Chryslers locally each year, showing that the company's focus has been on moving luxury cars off the lot.

"We've also sold two or three Maybachs every year since 2002," said a DaimlerChrysler representative named Rao, referring to the uber-luxury liner that lists at NT$20 million and can quickly go up to NT$30 million depending on what amenities the buyer selects. The difference in price between a bare-bones Maybach and a fully loaded one is five Lexus RX 330s, which list at NT$2 million.

One of the top-selling luxury automobiles in any other market, Lexus has nonetheless had a hard time making inroads into the Taiwan market compared with its success in the US, Europe or Japan.

This would seem an odd situation for the car's manufacturer, Toyota. The company boasts the best passenger car sales in the nation. Its Toyota Corolla alone accounted for 11.2 percent of all passenger cars sold last year, according to the Wards World Motor Vehicle Data annual of global car sales.

"Toyota has of course had a lot of success in Taiwan," said He Ji-yu (何冀禹), a sales representative with the Toyota Company. "We Taiwanese are very sensible and Toyota is a very sensible car. But now that Taiwanese have grown richer -- and perhaps because we've developed a taste for nicer things -- the company is starting to focus more on sales of Lexus models."