Lamborghini, Volkswagen’s (VOW:GR) ultra-rarefied brand, opened a second showroom in India this week in a bid to offset falling sales, as China’s elite tap the brakes on spending. Lamborghini Chief Executive Officer Stephan Winkelmann, who was in New Delhi to cut the ribbon on the new dealership, expects sales in China will decline by about 13 percent this year. A slightly cooler Chinese economy and government campaigns against lavish spending and graft take the blame for weakening the No. 2 market for the Italian sports cars.
In India, meanwhile, Lamborghini hopes to sell 20 cars this year. Several luxury auto companies are trying to get pole position on India’s burgeoning class of millionaires. But they face some potholes—literally. The country’s pock-marked roads are a major obstacle to a company that sells $500,000 spaceships on wheels. The carbon-fiber body of Lamborghini’s hot new Aventador model sits just 4.2 inches off the ground. Taxes and import fees are another problem. In India, the cost of a luxury vehicle can more than double once those charges are paid.
“This is an opportunity we see for our future. And we hope that sooner or later, in terms of taxation, in terms of infrastructure, this is going to be easier to market, and then you have the opportunity to grow in numbers,” Winkelmann told Reuters.
A second dealership shows a relatively notable sign of commitment to a new market—and, at the moment, Lamborghini only has one showroom in all of South America, in São Paulo. The brand has two in all Africa, in Cape Town and Johannesburg, as well as three in Australia.
Winkelmann is likely paying for greater attention to the U.S., Lamborghini’s No. 1 market and a territory in which it has been on a tear. Last year, one quarter of the 2,100 Lamborghinis sold were bought in the U.S., a 53 percent increase over the year-earlier period. Lamborghini sales everywhere else in the world look downright clunky in comparison.