The headlong dash by global automotive players to set up low-cost manufacturing capacity in China’s hyper-growth auto market is a familiar story. So is the relentless price-cutting pressure and profit margin squeeze foreign car companies face when they are up and running. As any auto exec will tell you, the mainland is an extraordinary growth story”and simultaneously one of the most cutthroat markets on the planet.
Then there is the remarkable exception of Rolls-Royce Motor Cars. Here is a fabled brand from a British car company that makes by hand its Phantom ultra-luxury sedans at a new plant with high-cost labor in Goodwood, near the south coast of England. It exports them into China, and thereby triggers stiff luxury taxes and import duties that effectively more than double the sticker price of the Phantom to $800,000 vs. what U.S. consumers would pay for a basic model. (They start at about $350,000 in the U.S.)[Full Text]