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China Luxury Car Market - Growth, Trends, and Forecast (2019 - 2024)

  • ID: 4622678
  • Report
  • August 2019
  • Region: China
  • 65 pages
  • Mordor Intelligence

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Market Overview

The Chinese luxury car market is anticipated to register a CAGR of about 8.66% during the forecast period (2019 – 2024).
  • According to the China Association of Automobile Manufacturers, from January 2018 – November 2018, the total sales fell by 1.7%, compared to the same period a year earlier, however, China’s premium car market still maintained stable growth in 2018. The luxury car market is concentrated and is being dominated by Mercedes-Benz, Audi, and BMW.
  • Irrespective of the weak market sentiment, the consumer confidence remained string and the country witnessed high demand for luxury cars in November 2018. Additionally, with the consistent rise in income and the supporting high demand for premium cars, the manufacturers of luxury vehicles reported positive sales figures from November 2018.
  • In 2018, total car units sold in the price segment of more than CNY 300,000 (USD 44,000) were approximately 1.16 million vehicles in 2018. All major manufacturers of luxury vehicles, including Mercedes-Benz, BMW, and Audi, reported positive figures in November 2018.
  • Additionally, the growth of luxury car demand among young people is also driving the growth of the market.
  • The luxury car manufacturers are currently selling Level 3 and 4 vehicles, focusing on conditional automated and highly-automated advancement, along with connected service that is being provided between smartphone and vehicle, which is further boosting the sales of luxury vehicles.
Scope of the Report

The Chinese luxury car market has been segmented by vehicle type and drive type.

Key Market Trends

Premium Automakers and Second-Tier Brands Gaining Market Traction

In 2018, the sales volume of the Chinese luxury car market reached 2.82 million units, a year-on-year growth rate of 8%, however, the growth rate was relatively slow. In 2017, the sales volume of the market was 2.61 million units, a year-on-year growth rate of 17%.

Currently, major premium car brands in the country, like Audi, Mercedes-Benz, BMW, Jaguar Land Rover, Volvo, Lincoln, and Infiniti, have already decided to cut suggested retail prices on models sold in China, in response to the government's VAT drop policy for the manufacturing industry. However, it cannot be anticipated that whether the price cut may boost sales performance in the future.

In February, 2019, BMW became the leading brand in the country, with a monthly sales volume of 44,582 units (including the sales of Mini cars). Whereas, Mercedes-Benz saw a drop in sales. Mercedes-Benz registered a year-on-year drop of 5.4% in February 2019. In February 2019, the sales of Audi A4L jumped 16.7% over the year-ago period to reach 10,888 units and the deliveries of the Audi Q2L reached 1,337 units. In February, 2019, SAIC-GM saw its sales decline by 38.9% from FY 2018 to 11,007 units, however, the company still held top position in the second-tier luxury car brands.

Changing Policies and Tax Regulations

The country’s luxury car market is led by European automakers, namely, Mercedes-Benz and Audi. As per the recent report from the China Passenger Car Association, the country’s luxury sedan segment grew by approximately 18.8%, in the first 11 months of 2018, when compared to the same period in 2017. Additionally, the premium sport-utility segment increased by approximately 3.5%, between January and November, in 2018.

In terms of policy and taxation reforms, China is considering a tax cut to revive its weakened automotive market. The tax cut may aid the country in supporting its automotive sector, which was dented by the on-going trade war with the United States, as it impacted the consumers spending power.

Irrespective of the aforementioned trade war, the country witnessed steady growth in luxury car sales. To mitigate the effect of the trade war, companies, such as Mercedes-Benz, Audi, and BMW, are planning to increase its production in China, as the trade war is putting pressure on global luxury brands, including Mercedes-Benz, which exports US-made vehicles to China.

Additionally, luxury auto dealerships, such as Zhongzheng, China ZhengTong, and China Yongda, in order to mitigate the effects of trade wars and increase their profits, are selling non-US made cars. Additionally, luxury car manufacturers are also cutting down the prices of their vehicle models, to increase their luxury car model sales in 2019.

Other initiatives taken by the Chinese government, to boost the automotive sector and increase the sales of luxury cars in the country, are –
  • The government now allows international automakers to set up more than two joint ventures in the country, and most of the international players already have more than two joint ventures with their Chinese partners. Additionally, they can also set up wholly-owned companies in the country.
  • Currently, only ultra-premium luxury auto brands are imported in the country, which may benefit from lower import tariffs, as these brands are fully-imported from non-US factories.
Competitive Landscape

The Chinese luxury car market is highly concentrated and majorly dominated by few players, like Volkswagen AG, Daimler AG, Geely, Toyota Motors, and BMW. Some of the major companies have their manufacturing plants set up in the country, giving them a cost advantage over their rivals, and further, providing 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 In absolute terms, it is Volkswagen (Audi) that comes out on the top followed by Daimler (Mercedes-Benz), and then, BMW. But the difference is very narrow, ranging from around 9,000 units to 13,000 units between the second and third place players, respectively

Reasons to Purchase this report:
  • The market estimate (ME) sheet in Excel format.
  • Report customization as per the client's requirements.
  • 3 months of analyst support
Note: Product cover images may vary from those shown
1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study



4.1 Market Overview
4.2 Market Drivers
4.3 Market Restraints
4.4 Industry Attractiveness - Porter's Five Force Analysis
4.4.1 Threat of New Entrants
4.4.2 Bargaining Power of Buyers/Consumers
4.4.3 Bargaining Power of Suppliers
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry

5.1 By Vehicle Type
5.1.1 Hatchback
5.1.2 Sedan
5.1.3 SUV
5.2 By Drive Type
5.2.1 IC Engine
5.2.2 Electric Vehicles

6.1 Vendor Market Share**
6.2 Company Profiles
6.2.1 Mercedes Benz
6.2.2 Volkswagen AG
6.2.3 BMW
6.2.4 Dongfeng
6.2.5 General Motors Company
6.2.6 Geely Holding Group
6.2.7 BYD Auto
6.2.8 Ford Motor Company


Note: Product cover images may vary from those shown


  • Mercedes Benz
  • Volkswagen AG
  • BMW
  • Dongfeng
  • General Motors Company
  • Geely Holding Group
  • BYD Auto
  • Ford Motor Company
Note: Product cover images may vary from those shown