Competition in luxury automobile segment in China heats up

The Chinese automotive market has been under a lot of pressure in May, with major automakers VW, GM, Hyundai and Nissan all seeing their sales fall. Even leading luxury manufacturers BMW and Audi also saw their sales fall in the month. However, despite the decline in sales most manufacturers in the luxury automobile segment are optimistic that their overall performances for the year will be strong.

Mercedes-Benz, which controls a 19.9% stake in the Chinese luxury automobile segment, saw its sales increase. Beijing Benz Vice President Duan Jianjun explained that the joint venture has done well due mainly to the competitiveness of its new products. Several industry analysts agree with Mr. Duan’s statement, pointing out that new models are a deciding factor to succeed in the luxury automobile market. With certain models like the Audi A6 and BMW 5 Series near the end of their lifecycles, pressure is on Audi and BMW to release newer, more attractive models, like the new Audi Q7, which makes its debut in Europe this month.

Audi, BMW and Mercedes-Benz dominate 75% of the Chinese luxury automotive market. However, aside from Jaguar Land Rover and Volvo, the second tier of manufacturers have made considerable progress in sales growth in May, with Infiniti seeing its sales grow nearly 50% over the course of the month.