China Luxury Car Market Outlook 2031:
The China luxury car market size was valued at USD 155.34 Billion in 2022 and is anticipated to reach USD 202.68 Billion by 2031, expanding at a CAGR of 3% during the forecast period, 2023-2031. China is regarded as the rapidly growing luxury market by most major auto manufacturers.
Germany-based premium car brands are disproportionately reliant upon China. While the industry saw a decline in the past two years, Germany-based luxury carmakers such as Mercedes-Benz, BMW, and Audi all posted record sales last year. A considerable amount of sales was reported from China. Among other car manufacturers such as BMW and Audi, Mercedes-Benz had an annual growth rate of 22.4%, while it was 15.4% and 10.6%, respectively.
The luxury vehicle sales grew by 9.3% year over year (YoY) in 2020, according to data from the China Automobile Dealers Association. This also marked the third consecutive year for luxury brands to register growth in the wake of downward fall in the China automotive market. Gasoline powertrain is likely to continue its dominance in the China luxury car market during the long term.
However, competition from Tesla in electric powertrains and the support offered by the government of China in evolving new energy powertrain vehicles are expected to accelerate the market adoption of both battery electric vehicle (BEV) and plug-in hybrid vehicle (PHEV) in China during the forecast period. The luxury carmakers focus on catering highly advanced cars with better connectivity to the smart devices and Internet which plays a crucial role in sales surge of premium cars.
China Luxury Car Market Trends, Drivers, Restraints, and Opportunities
- Initiatives took by the government of China to boost the automotive sector and increase the sales of luxury cars in the country are helping in attract new investments, which is estimated to fuel the china luxury car market growth.
- Rising disposable income is driving the growth of the market during the forecast period.
- The COVID-19 pandemic impacted the market growth in first half of 2020 owing to closedown of manufacturing facilities and dealerships. However, the relaxation in restrictions aided the market in recovery, positively stimulating the China luxury carmarket growth.
- The trade war between the US and China negatively influenced the growth of the market.
- In order to mitigate the effects of trade wars and increase the profitability in luxury auto dealerships, such as Zhongzheng, China ZhengTong, and China Yongda are selling non-US made cars. Thus, such practices are propelling the China luxury car market growth in the projected timeline.
Scope of China Luxury Car Market Report
The report on China luxury car market includes an assessment of the market, size, share, trends, segments, and regional markets. Overview and dynamics have been included in the report.
Luxury Car Market - China Industry Analysis, Growth, Share, Size, Trends, and Forecast
2016 & 2021
Vehicle Types (Hatchback, Sedan, and SUV), Drive Types (IC Engine and Electric Vehicles)
Asia Pacific, North America, Europe, Latin America, and Middle East & Africa
Market scope, analysis, share, competitive analysis, growth facts, restraints, opportunities, and revenue forecast
Key Players Covered in the Report
Daimler AG, BMW, Audi, Geely, Toyota Motors, and Tesla
China Luxury Market Segment Insights
Vehicles Types Segment Analysis
In terms of vehicle types, the market can be divided into hatchback, sedan, and SUV.
The SUV segment is projected to hold a significant market share. The SUV segment to account a major market share during the forecast period. SUVs provide better ride quality, higher ground clearance, and more space. Rising trend of buying SUVs is spurring the market growth.
On the other hand, the sedan segment is estimated to grow at a rapid pace in the coming years. Growing demand for sedan among government officials and middle-aged industrialists in the country is driving the growth of the market segment.
Drive Types Segment Analysis
Based on drive types, the China luxury car market can be bifurcated into IC engines and electric vehicles.
The electric vehicles segment is anticipated to account for a substantial share in the projected timeline. The market continues to have great potential due to the high rise in demand for electric cars. Luxury carmakers posted a positive sales growth from 2018 with a significant increase in demand for electric luxury cars among young population.
- IC Engines
- Electric Vehicles
Key players in the China luxury car market are Daimler AG, BMW, Audi, Geely, Toyota Motors, and Tesla.
Some of the major companies have their manufacturing plants set up in the country, providing them cost advantage over their rivals. Further, they provide a shorter timeline for the dispatch of their produced vehicles.
Volkswagen (including Audi), Daimler (Mercedes-Benz), and BMW are the top three players in the country. BMW dominates the market with higher sales than its Germany-based counterparts. On the other hand, the market of Tesla is growing at a robust rate in China due to presence of its manufacturing facility.