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Fighting for the Fourth Seat in China's Luxury Car Market
Summary: BMW, Audi and Mercedes-Benz may dominate China's high-end car market, but other brands are battling it out for fourth place.


By Zhou Jie (周洁)
Issue 635, Sep 2, 2013
Auto, page 35
Translated by Zhu Na
Original article: [Chinese]
 
Three German auto brands dominate China's luxury car market - Audi, Mercedes-Benz and BMW.

This "troika" accounted for 78 percent of high-end auto sales in China last year.

Many other foreign luxury car brands are trying to keep pace with the three big German brands and there is fierce competition to occupy the "fourth seat" in China's luxury car market.

Until recently, Japanese luxury car brand Lexus had occupied this fourth position for many years.

However, in 2012, sales of Jaguar Land Rover, a wholly owned subsidiary of the Indian Tata Motors group, increased by 74 percent with the company selling 73,000 units.

Land Rover branded vehicle sales alone totaled close to 66,000 units, up 83 percent on the previous year.

Lexus on the other hand only managed to sell 64,000 units, up 14 percent on the previous year.

However, with the impact of the Diaoyu Island controversy beginning to fade and the restoration of market confidence, Lexus wants to regain the coveted "fourth seat" position, and hopes to further strengthen its advantage by offering more hybrid models. The company has set a sales target of 80,000 units in China this year, of which hybrids will account for 25 percent.

Aside from Lexus and Land Rover, other auto brands also have their eye on the coveted "fourth seat." These other contenders include Volvo, Cadillac and Infiniti.

In the first half of this year, Volvo sales in China reached 28,700 units, a 34 percent increase on the sales made in the first hald of 2012.

Volvo was acquired by Chinese automaker Geely in 2010.

The desire to occupy the fourth spot in China's luxury car market is driven by the belief that a brand's global ranking will be determined by the company's performance in China.
 
Last year, 1.25 million new luxury cars were sold in China, making it the second largest market for high-end automobiles in the world after the U.S..

According to a report on China\'s "Premium Car Market" released by global consultancy firm McKinsey earlier this year, annual luxury car sales in China will reach 2.25 million in 2016, surpassing the U.S. to become the world's largest market for such vehicles.

Links and Sources
Economic Observer Online: Selling Mercedes-Benz in China
Economic Observer Online: Where is Geely Getting the Money to Buy Volvo?
Economic Observer Online: China\'s Luxury Car Market Slows
Economic Observer Online: Ordos Bust Creates Mecca for Used Luxury Car Buyers
McKinsey: Upward Mobility: The Future of China\'s Premium Car Market

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