On China's roads, luxury risks becoming ordinary

Little loyalty

A majority of car buyers in China, including those splurging on top-of-the-range premium models, are first-time buyers and have little loyalty to any global brand.

In an attempt to sway Chinese hearts and minds, Mercedes-Benz plans to build a brand museum in Beijing, a move that Volvo is also considering. Ford recently sponsored a classic car exhibition on Shanghai's Bund with its historic Lincoln models, while General Motors plans to allow some potential buyers inside its Cadillac plant in Shanghai to see their cars being assembled, according to Bob Socia, president of GM China.

Dealers at BMW and Mercedes-Benz outlets offer select buyers pomp and ceremony at the clinching of a deal - including ribbon-cutting, hand-shaking, photo-taking and a banquet. Some Land Rover Jaguar showrooms provide massage services and video rooms, and its newly-opened Shanghai store comes complete with a mini-golf site.

BMW this year opened a store on the former Expo grounds in Shanghai that doesn't aim to sell a single car.

The German firm's Future Retail Brand Experience Center rather 'sells' the BMW story, through historic model displays, photos and film. The aim is to hype the brand's heritage in a modern, art-gallery type environment.

"BMW was an admirable brand, but now people (in China) see BMW, Mercedes and Audi as mass luxury brands," said John Shen, senior partner at consultancy Roland Burger. "BMW and others are trying to revitalize their brands, to create more emotional values, more unique experiences at the retail level."

BMW's levers for differentiation, being tapped as part of the Future Retail initiative launched in 2011 in Britain, the Netherlands, France and China, are two-fold: Driving the brand-enhancing effort, as in the Shanghai experience center, and a new, non-pressure sales environment it is creating throughout its 200 retail outlets across China.

The company will deploy a so-called Product Genius - who is not a salesperson and isn't there to quote prices or push deals - at each BMW dealer in China. Interested customers are encouraged to drop in and browse - much as they might at a Prada or Gucci boutique - and they are given the kind of attentive service a visitor might expect from Four Seasons and Ritz Carlton hotels, Weletzky said.

Potential buyers will be able to configure their virtual dream BMW car on an iPad with a Genius, and then watch the result projected on a giant screen through 3D glasses.

At the 2-storey, glass-paneled BMW brand experience center in Shanghai earlier this month, Li Fuxi, an Audi-driving businessman from a small town in the eastern province of Anhui, sipped a cappuccino at the centre's mini-coffee bar.

After an hour spent with the Product Genius, hearing tales of BMW and its history, Li was warming to the brand.

"This place makes me feel good," he said. "I might even buy an i3," he added, referring to a BMW electric car due to hit Chinese showrooms next year.