Auto China Show 2006

But now the country's new rich are proud, and are keen to flaunt their wealth.

It is this fast-growing generation of self-made tycoons that the world's top luxury carmakers have set their sights on as they flock to the Chinese capital this week for the Auto China show, which opened today.

"We have over 300,000 millionaires in China, so I think it's a good number for us to go into the market," said Stephan Winkelmann, president and chief executive officer of Italian luxury sports car maker Lamborghini.

China's passenger car sales have been growing strongly, at 26.4 per cent in the first nine months of the year, amid a burgeoning affluent class and a desire by those who have made it to flaunt their hard-earned cash.

Rolls Royce sales are up 50 per cent from last year and China has become its third largest market after the United States and Britain, said Ian Robertson, chairman and chief executive.

"It is growing dramatically," he said. "There is a very fast growing number of very rich people in this country."

Sales in China, including Hong Kong, at 65 vehicles out of its global total of around 800, was "nearly 10 per cent of our business," Robertson said.

Porsche, which entered China in 2001, sold 857 cars in China last year and said it expected that figure to double in 2006.

With price tags ranging from $US377,215 ($A492,801) to $US554,430 ($A724,319), Lamborghini has sold just 25 cars since it started selling here two years ago but Winkelmann said the company expected to sell 30 each year in the near future.

Their Chinese clientele tend to be male entrepreneurs under 35, and were developing a discerning taste for luxury brands, while at the same time were keen to show off their wealth, the executives said.

"There is lot of peer pressure here... you've got to have this, you've got to have that... by positioning our brand, we're attracting a lot of business that way," said Mark Bishop, managing director of Porsche China.

And the prestigious brand forays into China are as much about testing the market in the untapped territory which they believe has tremendous potential, even if business is not immediately profitable.

"It's not so much selling the cars these days but getting to know the market... get to know how they live, eat, what their hobbies are," Winkelmann said.

"This market is going to explode in terms of high luxury and super sports cars so I think in years to come, there is a big potential in volume."

But distribution of wealth in China is extremely unequal and the sources of the fortunes of its new rich are often questionable.

With nearly 200 million people in China living below the World Bank's poverty line of one US dollar per person per day, the nation's richest 10 per cent are enjoying 45 per cent of the country's wealth.

There is also a disproportionately large number of Chinese tycoons on Forbes' rich lists over the years who have been linked to graft scandals.

International firms said it was no business of theirs to judge a client's background.

"I don't think these are the things you can be overly worried about, because you can't change your market positioning for that," Bishop said.

"We don't look into their history. They have got the money to buy, it's not the issue of the car industry to blame them, it's someone else's business," Winkelmann said.

"This is a phase in the economic growth of the country," he said.

While millions in China cannot afford their own luxury cars now, there is nothing to stop them from dreaming owning a Porsche, a revolution in itself given that such dreams were once an anathema to the ruling communists.

And this was evident at this year's auto show where hundreds of ordinary citizens thronged to the exhibition where many could not afford a ticket to get in the door and hung about outside in the hope of getting a free pass.

"I can't afford it, but I just want to look at the new models. I love cars and it gives me great satisfaction just looking at them," said 36-year-old driver Li Jinshui.

AFP