(Yicai Global) Feb. 13 -- Strong sales of luxury cars are forecast in China, the world’s biggest auto market, despite a lackluster sector overall.
High-end marques such as BMW and Mercedes-Benz are expected to maintain annual sales growth in the country of at least 10 percent over the next few years amid rising demand for entry-level models as the number of drivers looking to upgrade increases, according to a report from Essence International.
"The proportion of upmarket cars will remain at a higher level over coming years," said Luo Lei, deputy secretary general of the China Automobile Dealers Association.
Demand is rising as consumer habits are changing again, Luo added. Luxury car sales climbed 18 percent last year, according to the China Passenger Car Association, while the general market gained just 1.4 percent.
In 2017, sales of Audi AG, Bayerische Motoren Werke AG, and Daimler AG’s Mercedes-Benz -- the most popular first-tier luxury carmakers in China -- increased 1.1 percent, 15.1 percent and 25.9 percent, respectively.
General Motors Co.’s Cadillac, Chery Jaguar Land Rover Automotive Co., Toyota Motor Corp.’s Lexus and Volvo Car AB, regarded as the largest second-tier high-end brands, exceeded 100,000 units, an increase of more than 20 percent compared with the year before, according to official data from the companies.
Entry-level luxury brand cars priced at between CNY200,000 (USD31,662) and CNY300,000 are expected to post the largest sales growth figures in the future, Luo said. This category is especially popular among younger consumers. Total sales of the China-made Audi Q3 and A3, both priced under CNY300,000, accounted for nearly a third of the firm’s total sales in China last year. Its Q2 entry-level SUV will also be made in China, bringing down costs.Keywords: Luxury Cars, Consumption Upgrade