Latest statistics showed that in the first quarter of this year, China’s luxury car market achieved an increase of only 8.34%, indicating a fast shrinking. Compared to the first quarter of last year, sales growth year-on-year witnessed a decline of 80%. Industry insiders believed that, from the beginning of this year, the Chinese government carried out strict initiatives such as the regulated use of official vehicles and strict control of other luxury consumption, which had contributed to the overall public opinion change and reduced government demands that had casted a great impact on the consumption of luxury cars.
For many luxury car manufacturers, the Chinese market is a very profitable market with the growth rate being very high: in 2010, the domestic luxury car market increased by up to 80%; in 2011, China’s auto market as a whole achieved only 4% increase out of which the luxury car market still rose by 40%.
But since last year, the rapid market performance has slowed. Yan Jinghui, deputy general manager of Beijing Asian Games Village Automobile Exchange Market, said that last year China’s luxury car market showed up crazy price wars, some exchanged sale volume using low price strategy and the industry as a whole was affected. At the same time the market supply and demand had been affected by the macro-economic and policy implications.
In 2012, almost all imported car dealers were facing huge pressure on the stock. With slowdown in demand the growth rate of supply of imported cars dropped sharply. For the first quarter of this year, China’s imported vehicle reached a total of 229,000, reduced sharply by 19.4%. For major brands such as Audi, BMW, Volvo and other the 26 imported car brands, their cumulative sales of 213,000 suffered a year-on-year decline of 9.5%.
Despite a bad starting, according to a report by the international management consulting firm McKinsey published in March of this year, it forecasted in 2016 China may surpass the U.S. as the world’s largest luxury car sales market. For many luxury car brands, the Chinese market is still a quite attractive big cake.
Source: 京华时报 (Beijing Times), ChinaNews