Audi and BMW battle it to take control over the Chinese luxury market

Thursday 22 December 2011, 10:04 AM by

China is most likely to surpass Germany and become the world’s largest market for luxury cars. China will fall behind United States which continues to remain number one in this segment. The major reason for China's promotion to the second rank is that two of the biggest brands, Audi and BMW, are offering products quite frequently to the country.

According to Jenny Gu, a Shanghai-based analyst at the research firm Livingston Market Consultants (LMC), the capacity of the Chinese market to produce cars will probably hike 39 per cent to 9,39,000 units in 2011. She also said that in comparison with Germany’s sales growth of 4.4 per cent, China’s growth was much better at 16 per cent.

Due to the recession in Europe that will continue in the first half of 2012, according to economists at the Barclays PLC, the automobile market's big wigs like Volkswagen AG’s Audi Bayerische Motoren Werke AG, Daimler AG’s Mercedes-Benz are banking on the markets of United States and China to enhance their customer base.

Chinese customers are becoming wealthier and their demand for premium cars is increasing, making the Chinese market very ripe at the moment. “Luxury car demand is still on the rise in China with low penetration rates. Sales of such cars in developed markets like Germany fluctuate together with the economic cycle,” said LMC’s Jenny Gu.

Audi surpassed Daimler this year to become the second biggest luxury car manufacturer; however, to dominate the first spot by 2015, Audi will have to meet its target in China to outrank BMW.

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