Friday, March 15, 2013

China on track to become globe-top luxury-car market

China on track to become globe-top luxury-car market
Paul A. Eisenstein, the Detroit Bureau - 2 days

After luxury cars in China, the world's second largest market for expensive vehicles by 2016 and number one by the end of this decade when it will likely surpass the United States according to a new study by the consulting firm McKinsey & co. make it demand

But industry analysts and planners caution, several obstacles could delay or quite the boom in China, both at the level of the mainstream and luxury automobile short circuit asked.

Sales of premium vehicles are probably equal that of all of Western Europe until 2020 as incomes rise further in what now the world's second largest economy, according to is McKinsey & co. China the world's largest automotive market already total.

The delivery of upscale cars will probably rise reached 2.25 million by 2016, according to estimates of the McKinsey's and 3 million by the year 2020. McKinsey said in comparison with luxury-vehicle sales of 1.25 million in the last year, in the new report. The growth rate is expected to significantly exceed the entire Chinese market.

Increased income helps significantly as the General aspirations of Chinese consumers, who were prevented from owning luxury until recently. Also driving the shaft is the increased presence of the luxury manufacturers.

General Motors recently began production of the Cadillac XTS in Shanghai and expects to achieve revenues of the Caddy brand in China to 100,000 units by the year 2015. Virtually all large high-line brands, such as Mercedes-Benz and BMW, are already active in the country. And new decision makers are looking for access.

"We expect it to our market are number one", said Victor Muller, founder and Chairman of the small, Dutch Spyker cars, introduced plans for new products and global growth during a preview at the Geneva Auto Show this week.

Ford Motor Co. plans to start selling its Lincoln nameplate in China next year while PSA Peugeot Citroen its flagship DS car dealership in Shanghai, preparation is according to the report.

Nissan considers China as important, that set it before recently new headquarters for the luxury brand in Hong Kong. It tries, German Marques, led by Audi, which accounts for about 80% of the segment Highline challenge according to McKinsey.

"Now presented China's premium car market for a considerable chance for stragglers," authors Sha Sha, Theodore Huang, and Erwin Gabardi wrote in the McKinsey report. "Japanese and US attackers have to create another chance on a market presence."

Luxury car sales have compared increased 36% per year over the last ten years the rate of 26% for the entire car market, according to McKinsey. The segment remains attractive for automakers as 111 Chinese cities premium car dealerships, always even do not says a separate analysis from Morgan Stanley & co.

59% Said the respondents in its survey of Chinese consumers, a Chinese manufacturer of car that never will manage to build a luxury model, reaps the worldwide recognition not that they choose a local brand with purchase of premium vehicles, while 16% believe.

The luxury market can meet the high expectations, set by McKinsey and others?

The Chinese Government announced it GDP growth of 7.5% has opened unchanged target this year from 2012 as annual session this week. The country was also a lower inflation target of 3.5%, target, prices under control, according to the forecast at the premier hold Wen Jiabao's work report, as he opened the national people's Congress.

McKinsey noted that China's economy makes its historic shift to more consumption and service-driven model, sustainable growth of the country to help at a slower pace, but in the next decade and beyond.

"Showed that in November the new Government's China policy help 18th Congress of the Communist Party at the economy in this direction, even if investment will move - the historic engine of China's growth - still command the lion's share of the economy in the near future," the McKinsey analysis mentioned, adding that Government policy should "more and better - for China's future economic profile paid jobs and thus the proportion of the national income remains in the hands of consumers to create decisive."

But not everyone is quite so confident. Some skeptics note, that demand was unsafe vehicles after luxury last year forcing manufacturers such as Mercedes, get to adopt stronger price dynamics. last week reported that, there are growing concerns about a slowdown in the automotive market, the consequences of new efforts to endemic pollution could issues that steadily deteriorate in cities such as Beijing.

"they overnight can change policy if they want to," cautioned Spykers Muller, and which could bring total Chinese car market to a halt or just slow down.

The most likely scenario, however, is, that regulatory authorities require automakers to "battery cars and other clean technologies even more quickly than currently charged". Could play that well for some luxury brands, but as a manufacturer by Ferrari up to Audi have have been introducing new hybrids, plug-ins and full electric vehicles that could meet the new standards.

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