New Entrants Challenge German Luxury Automakers Dominance in China

on April 25 2014 | in Auto | by | with No Comments

Ford, Beijing, Beijing Auto Show, Auto China, car show

At this year’s Beijing International Motor Show, several foreign automakers, including Ford, Nissan, and General Motors, unveiled their plans to expand in China’s booming luxury vehicle market.

For years, this sector has been primarily controlled by three German automakers, who have a combined market share of 80 percent. Now, however market potential is high and attracting the attention of figures like Ford China CEO John Lawler, who recently introduced the automaker’s premium Lincoln brand into the country.

“Though other premium brands are well-established and deep-rooted in the China market, we believe Lincoln can still share a bigger slice,” Lawler said in an interview with China Daily. “The potential is huge. China is likely to replace the United States as the world’s largest luxury vehicle market by 2020.”

The US automaker plans to debut eight Lincoln showrooms in seven cities in China, beginning in October with Beijing and Shanghai. By 2016, Ford hopes to establish 60 stores in 50 cities nationwide.

Peter Schwarzenbauer, a member of BMW AG’s board of management, also believes that his company’s sales will grow in the not-so-distant future.

“Currently, only 17 million households can afford a premium car in China, while the number will amost triple to 49 million in 2025,” said Schwarzenbauer.

General Motors is also optimistic about future sales and has “set targets of 100,000-unit annual sales in 2015 and 10 percent market share in the luxury segment by 2020,” according to China Daily.

Smaller brands like Infiniti, a “US-born brand” of the Japanese automaker Nissan, also expect to see a boom. Though the brand has just a 1 percent market share in China, it has experienced “dramatic year-on-year growth of 54 percent in the past year and 114 percent in the first quarter.”

“With the kickoff of local production this year, I hope we can become fully integrated into the local market and achieve long-term success here,” said Daniel Kirchert, the managing director of Infiniti China. “We see China as our second hometown.”

image credit: 若昔难得

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