McKinsey predicts China’s premium car sales will exceed US demand within four years.
Ford's Lincoln Concept 6 Image: Ford |
Demand for luxury vehicles in China will reach 2.25 million units by 2016 and then double to 3m units in 2020, according to a report by US consultants, McKinsey & Co.
Sales are likely to eclipse both US and Western European sales by as early as 2020.
According to the report, the market presents a “sizable opportunity for latecomers”, meaning both US and Japanese automakers still have a place in the largely German-dominated market. Bankers, Morgan Stanley & Co, also see opportunity for growth in the 111 large Chinese cities which currently do not have premium car dealerships.
Nissan has been hard at work promoting its upscale Infiniti brand to Chinese consumers, while Ford is hoping to woo high-end buyers by reviving its iconic Lincoln brand for the Chinese market.
Luxury sales increased by 36% annually over the last ten years, compared to 26% for the total passenger car market. Strong economic forecasts for the next decade also bodes well for the continued growth in the luxury segment.
German manufacturers, led by Audi, currently enjoy a lion’s share of the valuable sector, accounting for over 80% of premium car sales in the region. This is a trend that is unlikely to reverse soon. According to a survey of Chinese consumers, 59% said they would not consider a local brand when purchasing a premium vehicle, while 16% believed that China would never be able to produce and internationally renowned luxury vehicle.