Rolls-Royce says China tax hike won't dent growth

Rolls-Royce expects sales of its luxury cars in the Greater China area to continue strong growth this year despite a doubling of the mainland's consumption tax for large vehicles, a company official said on Wednesday.

Rolls-Royce, owned by BMW, the world's biggest premium carmaker, sold 106 cars in 2007 in the region, which includes Hong Kong and Macau. That was up 51 percent from a year earlier.

Hal Serudin, the brand's corporate communications manager in the Asia Pacific region, said sales may grow at similar rate this year despite a hike in China's consumption tax on big cars to 40 percent, effective this week.

"People in our segment don't necessarily buy the car for price alone. They have other reasons," Serudin told Reuters at the roll-out in Shanghai of the Rolls-Royce Phantom coupe, powered by a 6.75 litre engine and priced at about 7.5 million yuan ($1.10 million).

Sales growth has remained strong so far this year and the order book for some of its Phantom series models is full well into 2009, he added.

China's transition to a more market-oriented economy is producing a constant stream of newly rich who are snapping up luxury items from posh apartments to private jets.

The country had 345,000 U.S.-dollar millionaires by the end of 2006, according to a report by Merrill Lynch and consultancy Capgemini.

The greater China area is already Rolls-Royce's third-biggest market, after the United State and Britain.