China-based major auto retailer Zhongsheng Group Holdings has bought 70% stake in German vehicle-personalization specialist Carlsson Autotechnik to meet growing demand from wealthy Chinese car owners for custom bodies and souped-up engines.
Zhongsheng chairman Huang Yi was quoted by The Economic Times as saying that the firm is formulating ‘aggressive plans’ for Carlsson.
Yi added that the acquisition of Carlsson is aimed at an increasing population of owners in Beijing, Shanghai and other major cities across the nation.
"The problem is there are so many Mercedes, BMW and Audi cars in Shanghai and Beijing that those cars sometimes feel like mainstream cars, like driving a Camry in Los Angeles," Yi said.
He noted that Zhongsheng and Carlsson plan to establish a small chain of Mercedes-Carlsson retailers in China to sell super luxury Carlsson-customized Mercedes cars.
Carlsson will have the opportunity to take advantage of Zhongsheng’s network of dealers stretching from Heilongjiang province to Guangdong.
Carlsson has authorization from Mercedes-Benz for most of the products it retails, a status that allows Mercedes car buyers to keep warranties for their vehicles from being nullified if they install after-market parts.
The two firms also plan to set up manufacturing facilities within China to produce Carlsson customization accessories and kits for brands that Zhongsheng represents.
Currently, Zhongsheng operates 140 stores and markets cars for an array of foreign brands including Lexus, Volvo, Porsche, Toyota, Nissan and Mercedes.
Yi said margins on car accessories Zhongsheng sells are already ‘formidable’ and in 2011, the Beijing-based auto retail group has sold CNY300m ($47m) worth of accessories through its network.
The group’s revenue from new automobile sales amounted to CNY38.24bn in 2011, representing an increase of 74.3% compared to the previous year.
During the year, Zhongsheng has set up 18 new dealerships in Chongqing, Fujian, Guangdong, Liaoning, Sichuan, Yunnan and Zhejiang, including 10 luxury brand dealerships such as Audi, Lexus, Mercedes-Benz, and imported Volkswagen.