Luxury Car Sales Surge in Financial Crisis

　　Generally speaking, luxury goods market is one of the markets which are most severely affected by the financial crisis. Luxury car market can not get rid of the impact according to that rule. In 2009, 4,940,000 units of luxury cars were sold in global market, down 16% compared with 2008. At the same time, the decline degree of global car market was only 7%. The decline extent of luxury car market was significantly higher than that of global car market. As the leader of luxury car market, the sales of luxury cars in America dropped by more than 20%. Although German auto sales increased by 18% in 2009, the sales of luxury cars dropped by 10%.

　　However, in China despite the fact that financial crisis affected developed areas severely; luxury car market in 2009 still maintained a 33% growth.

　　In 2002, the scale of Chinese luxury car market was so small and only 50,000 units of luxury vehicles were sold that year. However, the situation had changed in last several years. In 2009, the sale of luxury cars were up to 390,000 units in China and the average annual increase reached up to 36% in the past few years. With the scale of China’s luxury car market becoming bigger and bigger, China’s share in global luxury car market grew from 0.9% in 2002 to 7.9% in 2009. China became the forth biggest luxury car market in the world in 2009. According to some experts' forecast, China will surpass the UK to become the third biggest luxury car market in the year of 2010.

　　China got rid of the impact of the financial crisis firstly and the potentials of Chinese luxury market are huge.

　　Facing the most serious financial crisis in a century, Chinese luxury car market once saw a downturn, just like the situation of other countries. In the second half of 2008, the growth of China luxury car market undergone a significant slowdown and the situation lasted until the first half of 2009. In the second half of 2008, with the recovery of the Chinese economy, luxury car market restored to the original growth quickly, and gained a 50% increase compared with the same period in last year. In 2010, the development tendency of Chinese luxury car market is more stable. In January and February, the new-sold luxury cars in China increased by 50% compared with 2008, far higher than the overall 27% growth in passenger cars.

　　China's luxury car market has been developing quickly in the last ten years. However, compared with the developed countries, the share of luxury cars in China car market is still small. There is still a long way to go. In 2009, luxury cars’ share in entire domestic auto market was only 4%, well below the level in United States, Britain and other developed countries, in which the share was around 10% to 20%. So the potentials of China’s luxury car market are still huge.

　　Thanks to China market, Audi gained a success in the financial crisis. The future of luxury car depends on China.

　　The extent of expansion in China luxury car market has become the key factor for luxury car bands to win the competition. In 2009, BMW and Mercedes-Benz both saw a 15% decline. What’s worse, the decline extent of some luxury car brands such as Cadillac was even up to 30%. But the situation of Audi was different. In 2009 the sales of Audi dropped slightly by 2%. Audi’s achievements were obviously closed related with the Chinese market. In 2009, 16% of Audi’s sales came from China market, and Audi's greatest rival Mercedes-Benz and BMW’s contribution rate of the Chinese market was respectively only 5% and 7%.

　　Audi's achievements in China luxury car market resulted from its earlier management. In the past ten years, the status of Audi in China market has embraced a great change. Ten years ago, the share of Audi in China luxury car market was even less than half of Mercedes-Benz. However, in 2009, the share of Audi was only 5 point lower than Mercedes-Benz. Recently, Audi announced its plan. In the new plan, Audi wants to become the first luxury auto manufacturer in the world. Just because of the tremendous growth in China luxury car market, Audi dares to realize the target. In the first quarter of 2010, China surpassed Germany to become the largest market for Audi. Meanwhile, for Audi’s main rival BMW and Mercedes-Benz, China luxury car market was only their fourth and sixth biggest market. As to the problem whether Mercedes-Benz and BMW can keep their status in the global luxury car market, China luxury market has become the most important battlefield. China luxury car market has become one of the most important markets in the world and the management situation of luxury car brands in China will determine their future destiny. (Translator: Qinghua/Kevin)

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