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Entry-Level Luxury Cars Gaining Popularity in China

Date:02-16 09:40 Source:China Automotive Review Authour:ennifer Chen

Entry-Level Luxury Cars Gaining Popularity in China

Entry-level luxury cars have enjoyed dramatic sales gains in China


Entry-level cars of the three brands, including the Audi A4L, BMW 3-Series, BMW Mini, Benz C-Class and the Benz Smart, have enjoyed dramatic sales gains in China.

The three traditional dominators in China’s luxury car market, the Audi, BMW and Mercedes-Benz, boosted their sales in the first half of this year with sales volume reaching 139,130, 113,169 and 92,174 units, up 28, 60.8 and 59 percent respectively compared with the same period of last year. Entry-level or low-end cars of the three brands, including the Audi A4L, BMW 3-Series, BMW Mini, Benz C-Class and the Benz Smart, have enjoyed dramatic sales gains.

For example, the Audi A4L registered sales as 27,500 units in the first five months, up 24.1 percent year-on-year, while the brand’s traditional sales champion, the Audi A6L, dropped 7.2 percent during the same period. The Benz C-Class sold 10,940 units in China through May, surpassing the Benz E-Class long-wheelbase version in terms of end sales. Sales of BMW 3-Series also increased 20 percent to 16,654 units in the January to May period.

With outstanding sales performances for the C-Class, Smart and GLK, the so-called “Young Mercedes lineup” remains popular among Chinese customers. According to Fu Qiang, executive vice president of Bejing-Benz, entry-level sedans, including the Benz C-Class and the Benz GLK, will take up more market shares in the future than other models in the product lineup of the joint venture.

Before 2008, more than half of China’s luxury car market had been taken up by executive-level luxury cars such us the Audi A6L, BMW 5-Series and the Benz E-Class sedans while the entry-level cars only took up less than 20 percent of the total market share. However, the situation has changed recently because of the declining prices of entry-level luxury cars and the increasing population of the “nouveaux riche” younger generation.

The low-price strategy of luxury car makers has boosted the sales of their entry-level vehicles in China. The Audi A4, Benz C-Class and the BMW 3-Series all wear price tags of less than RMB300,000 (US$44,118) in China, which is a large attraction for brand- and economy-orientated Chinese consumers.

Young customers, especially those born in the 1980’s, represent an important buying force of the low-end luxury cars. The China auto market is experiencing a turning point after 10 years’ high-speed development with quality and enjoyment being more important to potential buyers.

Because of the lot-drawing system for license plates in Beijing, car purchasers tend to buy higher-class vehicles to make full use of the precious quota, and the low-end luxury cars are proving increasingly attractive to them. Entry-level luxury cars will become the mainstream models in the China auto market, which provide new opportunities for automakers confronting the staggering B-class market.

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