14 October 2010

Porsche in China

I had the opportunity to test drive a Porsche the other day with a friend of mine who is buying one.  We went over to the dealership near People's Square.  I always thought you had to show up in a fancy car and act like a big shot to be able to test drive a Porsche, but it was actually remarkably easy.  The salesman was a nice guy from Shandong province and all I had to do was give him my driver's license and cell phone number and we were on our way.

The showroom was filled with some interesting characters.  The predominant type was very young Chinese girls in designer heels not fit for driving checking out Boxsters and Cayennes while their significantly older boyfriends talked to the salesmen about prices while chain smoking Chung Hwa cigarettes (the brand of choice among the wealthy business/government set).  One girl had an LV bag that was so big I don't think it would have fit in a Porsche.  Then there was the young guy probably not yet 30, wearing gym shorts, a t-shirt, and flip flops, signing the papers on a new 911, paid for in cash.

The level of conspicuous consumption here makes New York City absolutely pale in comparison.

Finally we headed down to the car park below the dealership, where there were about ten Porsches of varying specs.  We got up to street level and it was raining pretty hard.  Finally driving now.  Ripping down People's Avenue (人民大道), with People's Square and People's Park flying by my windows on either side, in the pouring rain, in a bright yellow 911 Carrera 4S was pretty awesome.  The sales guy was on his cell phone the whole time chatting with his girlfriend, and seemed not to care or notice that we were doing 150km/h down the crowded city streets.  I went for a second loop.

Later I asked the salesman how business was at the dealership.  He said he personally sells about 15 cars per month, but that the top salesman sells 30 per month.  There were about 15 salesmen on the floor that day.  That's about 250 Porsches moving out the door every month, and it's only one of several dealerships in Shanghai.  Recession?

No wonder Porsche cited the Chinese market as the driving force behind their decision to produce a full size 4-door sedan, angering some diehard customers.  The Chinese business men who buy luxury cars here rarely drive themselves; it's cheap and convenient to have a driver.  So Porsche needed a car with a real back seat to compete.  Hence the new Panamera.

The really shocking thing about the brisk business at the Porsche dealership is the prices, which are astronomical compared to the (already expensive) cost of a Porsche in the USA.  For example, the above car, a 911 Turbo, retails for $135,000 in the US, maybe $150,000 with options.  Now check out the price in China:

That's RMB2,783,500 or about $420,000.  So the same exact car is about 3 times more expensive in China than in the USA.  Why?  Mainly it's because of stiff import duty of more than 100% on luxury goods, plus an array of other taxes.  The high price sure doesn't seem to be deterring Chinese consumers.  The salesman told me that most models have waiting lists of about 6 months.

13 October 2010

Shanghai Expo 2010

Now that the Shanghai Expo is winding down in 3 weeks, I'm finally getting around to posting about my visit there a few months ago.  The Expo hasn't really been in the news much lately, as things have quieted down a lot since it first opened.  At the beginning, they were getting attendance numbers upwards of 500,000 people per day.  Lines at the popular pavilions (China, USA, UK, France, Saudi Arabia) were more than 5 hours long.  People were pretending to be disabled and riding in wheelchairs (or finding actually disabled people on the street and paying them to accompany them to the expo and pretend to be related) so they could go in the separate lines for elderly and disabled.  Tickets were being sold on the black market at outrageous prices, and people were generally Expo crazy.  Now the situation surrounding the Expo is a little more sane.

I went with some friends a couple months ago when the crowds were still huge.  Despite the huge crowds, it was still an enjoyable experience and I must give props to the organizers for pulling off such a huge event without many problems.  The infrastructure of the place is pretty amazing.  A new subway line was opened just to serve the Expo.  Free buses run around the site to take you from zone to zone.  There were plenty of volunteers (most of whom spoke good English) to direct you.  The architecture of some of the pavilions was really stunning.

But, as everyone has noted, the big downside is the outrageous lines.  On the day we went, it was pouring rain all day.  You might think that would put a damper on attendance, but nonetheless, the lines were daunting.  South Korea, Japan, USA, China, UK, Spain, France, Taiwan, and Saudi Arabia all had lines of more than 5 hours.  So we skipped the popular ones and went to the smaller pavilions where the lines were negligible or nonexistent.

Portugal was pretty cool, with a great movie which highlighted their culture.

Here is a picture of the UK pavilion, which is made of thousands of shiny fiber optic spikes which light up and change color at night.

The Italian pavilion was surprisingly not too crowded.  We had to wait in line for about 30 minutes.  Of course I liked this one because it was filled with Ducatis and Ferraris.  

There is one big pavilion which housed all the African countries.  Most of them were really similar, showing poor villages, folk crafts, dirt roads, etc.  Kenya of course had a poster proudly proclaiming Obama's Kenyan heritage which was pretty cool.

The most interesting thing in the African pavilion was how many of the countries highlighted the recent Chinese investment that has come their way.  From the new port in Senegal, to several airports around the continent, to mining sites, railways, and more, lots of the countries were showing off new development projects made possible by Chinese investment.  Part of that no-strings-attached investment/aid which China has been spreading around Africa (some say in exchange for access to resources) over the past decade.

The most surreal pavilion was, of course, North Korea.  The displays and videos naturally painted a beautiful picture of what it's like to live in the happiest and more prosperous country on earth, highlighting the world-class hospitals, universities, subways, hotels, and stadiums that North Korea boasts.

I snapped this picture of the guy working behind the counter selling North Korean paraphernalia and souvenirs.  It's hard to tell from the blurry photo, but I couldn't help but notice the Ralph Lauren logo on his shirt, right next to the obligatory pin of the Dear Leader, Kim Jong-il.  Talk about opposite worlds.

For many Chinese people who will  never have the opportunity to leave China, the Expo is as close as they'll ever get to seeing the outside world.  Hence the daily crowds of half a million people pouring in from all over China.  For a foreigner, the Expo remains a kind of quaint idea, hearkening back to World's Fairs.  Anyway, despite the pouring rain and huge crowds, a visit to the Expo was nonetheless an enjoyable way to spend the day and we had a great time.

It's even better to go now that it's not too hot and the crowds are smaller.  I also just received an email from the American Consulate in Shanghai announcing that the American pavilion has opened its VIP entrance to anyone with an American passport, meaning that you don't have to wait in line, so I may go check that out in the next few weeks.  Though the American pavilion has been plagued by scandal and lack of funding and uncertainty from the start, I might as well check it out.  How could I not?  After all, Hillary Clinton gave it such a glowing review, declaring on her visit to Shanghai in May, that, "it's fine."

For far better coverage of the 2010 Shanghai Expo, check out the Expo section of Adam Minter's blog: Shanghai Scrap.