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Inchcape PLC, Rolls-Royce Sign China Distribution Agreement

April 19, 1994

BEIJING (AP) _ Rolls-Royce Motor Cars Ltd. signed an agreement Tuesday awarding Inchcape Motors International exclusive rights to import and distribute its luxury cars in China.

The signing ceremony was held at China’s Great Wall, near Beijing.

Inchcape plans to establish import centers in Beijing, Shanghai and Canton and appoint dealers on Hainan Island and in Canton, said Ian Skeggs, the company’s director for the Asia-Pacific region.

He said Inchcape has sold 51 Rolls-Royces to the mainland via its franchise in Hong Kong since 1992. The franchise sold 30 luxury cars in 1993, and 11 in the first quarter of this year, mostly to customers in southern China just across the border from Hong Kong.

The buyers include foreign joint ventures and luxury hotels, but most are private Chinese businessmen, Skeggs said.

Michael Donovan, a Rolls-Royce managing director, said he expects sales to reach about 100 a year within a few years.

″There’s obviously a very good demand here for luxury goods, whether it be cars, clothing or jewelry,″ said Skeggs.

Counting China’s 150 percent import duty, a Silver Spur model costs about 2.25 million yuan, or $260,000, Skeggs said.

Cars are out of the reach of most Chinese, with urban per capita incomes of just 2,340 yuan, or $270 a year. But some businessmen regard a luxury car as an indispensable indicator of their success.

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