China’s consumption upgrade props up shrinking car market with locally made premium models flying off the assembly line
- Sales of 10 premium brands, which includes BMW, Mercedes-Benz, Audi, Volvo and Lexus, have risen in a steeply declining market
- Overall car sales in China have fallen 11 per cent in the year’s first eight months to 16.1 million units
The sole ray of sunshine in China’s bleak car market is the luxury segment. While overall sales have shrunk in 14 of the past 15 months, rich consumers have been snapping up locally made premium models, helped by competitive pricing.
“The relatively more resilient demand for premium cars is driven by China’s consumption upgrade,” said Toliver Ma, an auto sector analyst at brokerage Guotai Junan International. “Affluent consumers are still willing to spend, even as the economy has long been slowing. That said, even premium car sales have slowed.”
The sales of 10 premium brands, which includes BMW, Mercedes-Benz, Audi, Volvo and Lexus, have risen in a steeply declining market.
Car sales on the mainland fell 9.9 per cent year on year in August, according to China Passenger Car Association, with overall sales declining 11 per cent in the year’s first eight months to 16.1 million units. In the first 22 days of September, weekly sales tracked by the association showed a sharper 11.8 per cent decrease.
However, sales of China-made BMW cars jumped 25.9 per cent in the first half from the same period last year to 264,194 units, according to the German giant’s joint venture partner Brilliance China Automotive.
This was primarily due to the contribution of X3, a compact crossover SUV. Excluding the X3’s sales, first-half volumes grew only 1 per cent. It is BMW’s sixth model produced in China since June last year.
