Porsche Joins Cambodia’s Luxury Car Race

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by Ben Woods

Though still one of the poorest countries in the region, Cambo­dia’s recent economic growth has birthed a new class of consumer. And waiting in the wings is Ger­man automaker Porsche, which in­tends to sell its distinctive sports cars directly to Phnom Penh’s wealthy within a year.

Following hot on the heels of rival BMW, Porsche will begin construction on a $1.5 million showroom and service center in Phnom Penh shortly after mid-year, said Graeme Hunter, Cam­bodia general manager for Hong Kong-based automobile retailer Lei Shing Hong Limited, which will build and operate the facility on behalf of Porsche.

“The timing is right,” Mr. Hunter said on Monday. “BMW is coming…Mercedes is here already, so it makes sense for Porsche to be here as well.”

Lei Shing Hong—which is also Porsche’s authorized distributor in Vietnam and South Korea—will invest an initial $2 million in Cam­bodia, and hopes to import be­tween 40 and 50 vehicles by early 2014, Mr. Hunter said. With tax, the company’s range of iconic 911 coupes, Panamera sedans and Cayenne SUVs will sell for be­tween $100,000 and $200,000.

Mr. Hunter conceded that marketing the luxury cars won’t be easy.

“It’s going to be tough…. The brand awareness is not what it would be in other countries,” he said, referring the Cambodians’ affinity for large SUVs made by Japan’s Toyota and Lexus.

But echoing the argument made by Munich-based BMW when it broke ground on a dealership on Russian Boulevard in Pur Senchey district in Decem­ber, Mr. Hunter said that by of­fering a warranty and after-sales maintenance, Porsche would be able to compete with the country’s many “gray-market” im­porters, who offer vehicles of mur­ky provenance with no guarantee of quality.

There are currently about 40 “gray-market” Porsches in Cam­bodia, Mr. Hunter estimated, mostly Cayenne SUVs, which sell for about $130,000.

Peter Brongers, CEO of Pre­mi­um Auto Import Co. Ltd., BMW’s authorized distributor in Cam­bodia and a subsidiary of local conglomerate Royal Group, said that while a newfound taste for German cars among Cambo­dia’s wealthy would help Porsche’s sales, its vehicles may be perceived as impractical.

“A Porsche is a sports car—it’s a low sports car,” Mr. Brongers said, adding that the company’s cars would not be useful outside Phnom Penh, where roads are frequently in dire shape—unlike his own brand of German luxury car.

“Even if the roads are not so great, a BMW drives really well,” he added.

Finn Gundersen, general manager at Envotech Co. Ltd. Cam­bodia, which has been Land Ro­v­er’s authorized distributor since 2005, said he looked forward to the competition Porsche would bring to the market. “We welcome Porsche to come in. Audi, BMW. Let them come in, let there be competition,” he said.

Mr. Gundersen added that Porsche’s decision to come to Cam­bodia shows that the country is prospering. “It’s a question about the development of a coun­try itself,” he said.

“Everybody is getting richer,” he added.

But Khem Ley, a social development research consultant, said Porsche’s soon-to-be presence was not so much a sign of overall economic growth as an indication of the growing gap between rich and poor.

“The poverty gap is very, very big,” Mr. Ley said, noting that the country’s wealth is concentrated in urban areas, where only a small proportion of population lives.

“Very few people are gaining from this…15 percent of the people are getting the benefits of the economic growth,” he said.

Reproduced by kind permission of the Cambodia Daily

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