Setting up Chinese factory may not be a good choice for Porsche who is stepping up development strategy in China

"We all know that not all of those luxury brands who have set up factories in China can succeed at last. If I can say my words with regard to whether Porsche should be manufactured in China, I will definitely say no," said Fang Zhiyong, CEO of Porsche in China.

Now the sales of Porsche in China account for 25% of total sales worldwide, which indicates that China has become the largest single market of Porsche in the world.

Based on the performance of Porsche in China, it is safely to say that its sales can reach 60,000 units by the end of this year, surpassing that of many luxury brands that are made in China. Therefore, it is reasonable for Porsche to think about establishing factories in China.

There is no doubt that setting up factory in China can be helpful for cost reduction and mass production for Porsche. Moreover, the high tariff and parallel import both have influence on the price of Porsche in China. Of course, the disadvantage of putting production in China can not be neglected. But it can minimize the risk by learning from VW, who is experienced in localization in China.

"Though, we have not any plan to put production of any model in China at present. Because the main reason that people prefer Porsche lies in that they prefer the German technology Porsche uses," said Fang Zhiyuan, who has never doubted that Porsche has always been positioned as ultra-luxury brand.

In fact, however, Porsche turns out to be a brand positioned between luxury and ultra-luxury brand. More and more Chinese customers tend to compare Porsche with those luxury brands like BMW and Audi when buying cars.

"China turns out to be the fastest growing market in the world. Porsche thinks high of Chinese market and we will continue to expand our distribution channels to third-and fourth-tier cities in China," declared Fang Zhiyong when talking about the development of Porsche in China.

But the expansion strategy of Porsche can thought to be cautious. “We expand our distribution channels based on the market demand. We have to make sure that our franchisers can make profit,” emphasized Fang Zhiyong.

"Being a luxury brand means you have to be really cautious about your expansion strategy in a specific market."