China is driving towards to an electric future and has speeded up its environmental efforts yet again. The rapid growth of the electric car industry is supported by the Chinese government’s favourable subsidy policy, which is very generous.
In addition to consumer subsidies, many cities provide favourable policies, such as the assured issuance of a vehicle licence and increased access to carpool lanes for electric car purchasers, and the government plans to roll out 120,000 more charging points in cities across the country. A case in point is in Beijing, where a road-space rationing policy has been announced that does not permit petrol-powered cars to be driven on public roads within the 5th Ring Road, city centre area, for one day every week.
Tesla holds just a tiny value share of luxury cars in China. On June 18, while US-China trade tensions continued to rise, China announced it would raise import duties on a USD34 billion list of US goods, a list that included electric cars.
The year 2017 set more records for German luxury car makers, with Mercedes-Benz, BMW, Porsche and Volkswagen selling in record numbers in China; however, Audi did not perform well. Audi, Mercedes-Benz and BMW are the three giants that undoubtedly dominate luxury car sales in China, with the three together controlling about 70% of sales.
Audi underperformed in China in 2017. Ever since Audi entered China in 1988, it had held first place; however, this changed in 2017.
There is rising demand for cars ranging in price from CNY300,000 down to CNY50,000, a comparably high price range for regular passenger cars but relatively low for luxury brands. An increasing number of consumers are moving up into this range, and Chinese consumers have a strong affinity for luxury cars over mass sales.
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Understand the latest market trends and future growth opportunities for the Luxury Cars industry in China with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Luxury Cars research and analysis database.
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