China To Speed Past Germany To Become World's Second-Largest Luxury Car Market

Luxury Auto Sales In China Expected To Climb 39 Percent To 939,000 This Year BMW sales remain strong in China, particularly in second-tier inland cities Though slowing property and stock markets continue to put pressure on luxury auto sales in China, leading carmakers like Mercedes-Benz and BMW dealers to deepen discounts on some models last month, overall figures for 2011 show that the luxury segment of the Chinese auto market continues to roar ahead. As Bloomberg notes today, with luxury sales expected to surge 39 percent this year to 939,000 units, China is expected to surpass Germany to become the world's second-largest luxury auto market. This would put China behind only the US, where 2011 auto sales are expected to climb 18 percent to 1.65 million units. Though sales growth is expected to halve next year in China to around 16 percent (compared to 4.4 percent in Germany), major automakers continue to pin their long-term hopes on the China market, with Audi relying on continued growth there to help it achieve its goal of surpassing BMW to become the world's top luxury automaker by 2015. From Bloomberg: The largest luxury carmakers -- Bayerische Motoren Werke AG, Daimler AG (DAI)’s Mercedes-Benz and Volkswagen AG’s Audi -- are counting on China and the U.S. to fuel expansion next year as economists at Barclays Plc estimate Europe may be in recession through the first half of 2012. The German car market, Europe’s largest, probably won’t grow next year as the debt crisis saps consumer confidence, auto-industry association VDA said this month. The growing affluence of Chinese consumers has fueled demand for luxury goods, though that market has cooled. “Luxury car demand is still on the rise in China with low penetration rates,” said LMC’s Gu. “Sales of such cars in developed markets like Germany fluctuate together with the economic cycle.” Audi, the luxury-car sales leader in China, needs the country to help meet a target of surpassing BMW as the global No. 1 in 2015. Audi surpassed Daimler this year as the second- largest luxury-car maker. All three luxury-auto makers posted record November sales in China. Audi soared 69 percent over last year, BMW (BMW) rose 9.8 percent and Mercedes gained 24 percent. Industry-wide sales in Europe of all cars last month fell 3 percent. Audi’s 11-month sales in China have advanced 35 percent to 283,600. BMW through November has climbed 40 percent to 200,699, while Mercedes has gained 31 percent to 170,112. While all eyes remain fixated on what will happen next year in China's luxury segment, at the moment, little seems to threaten the current growth we're seeing in the ultra-luxury segment. In emerging inland cities, automakers like Rolls-Royce, Bentley and Aston Martin are battling it out to tap wealthy buyers. As we wrote earlier this week: Though demand for luxury cars is showing signs of slowing somewhat in China at the mid- to premium range, the ultra-luxury segment seems to be largely unscathed, particularly for limited-edition models. As Jing Daily noted earlier this year, Aston Martin sold all five of the One-77s the automaker had set aside at the Shanghai Auto Show before doors opened to the public. Since then, other automakers like Bentley have dug in their heels in China, particularly in second- and third-tier cities, with Bentley launching dealerships in cities like Xi’an, Wenzhou, and Zhengzhou.

China To Speed Past Germany To Become World's Second-Largest Luxury Car Market

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Published December 21, 2011

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China To Speed Past Germany To Become World's Second-Largest Luxury Car Market