Manufacturing News

Dealership Group Zhongsheng Buys Carlsson Stake

Zhongsheng Group Holdings, a major Chinese auto retailer, has acquired a 70 percent stake in German coach-building specialist Carlsson Autotechnik to meet rising demand for custom bodies and tuned engines.

Chinese auto retailers like Zhongsheng and Pang Da are diversifying their offerings to gain market share as the country's rich spend millions on luxury cars.

Zhongsheng's chairman, Huang Yi, said on Friday that the company is formulating "aggressive plans" for Carlsson.

Huang declined to disclose the financial details of the investment and declined to quantify what kind of revenue and profit growth Carlsson can generate for Zhongsheng.

However, he noted that profit margins on accessories sold by Zhongsheng are already "formidable." Zhongsheng sold 300 million yuan ($47 million) worth of accessories last year through its network, he said.

"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," Huang said.

Mercedes customization
Most of Carlsson's products are authorized by Mercedes-Benz, an agreement that means Mercedes buyers' vehicle warranties won't be cancelled if they install aftermarket parts.

Huang said Zhongsheng and Carlsson plan to establish a small chain of Mercedes-Carlsson retailers in China to sell super-luxury Carlsson-customized Mercedes cars.

They also plan to establish manufacturing facilities within China to produce Carlsson customization accessories and kits for brands that Zhongsheng represents, Huang said in an interview last week in Beijing.

The Beijing-based auto retail group currently has 140 stores and markets cars for an array of foreign brands that include Mercedes, Lexus, Volvo, Porsche, Toyota and Nissan.

China's vehicle customizing market is so new that few companies track sales, making it difficult to assess the market's size, although anecdotal evidence of its promise is easy to see on big-city streets.

Driving through Shanghai and Beijing, Huang said observers can see a number of high-end vehicles with customized paint jobs or special alloy wheels.

According to Beijing-based market research firm Sinotrust, 90 percent of 1,237 car owners contacted in a recent survey indicated interest in purchasing accessories, while 53 percent noted a desire to do so to "express their personal taste."

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