Mercedes Maintains Leadership in China’s Luxury Auto Sector

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The luxury car segment in China continues to expand with demand for premium auto brands running high. Sport utility vehicles (SUV) are also seeing an increased demand, following the recent shift in consumer preference.

Mercedes continues to dominate the luxury auto market in the country. The S-class maker delivered 38,133 vehicles in March, representing a 26.6% year-over-year (YoY) growth. The company maintained its market leadership, selling 106,641 units in the first three month of the year, up 36.4% against comparable period last year. The strong demand was mainly driven by growth in SUV segment in the country, according to Mercedes.


Demand for foreign luxury cars has been rising over the past few months despite a slump in the Chinese economy. Demand for luxury vehicles nosedived last year, following the mid-summer stock market crash which wiped out billions of dollars from the economy. However, market for luxury vehicles saw an improvement as stock markets stabilized. Last year, Mercedes sold 373,459 vehicles in China, reflecting a tremendous 32.6% YoY growth, mainly driven by sales of the S-class model.

Sales of General Motors Company’s (NYSE:GM) luxury brand, Cadillac, rose 14% in March from a year earlier, totaling 7,588 deliveries in China. The US auto manufacturer also announced to launch 10 new models of Cadillac and introduce the XT5 luxury crossover tomorrow. Earlier this year, Cadillac introduced its new, top-of-the-range CT6 prestige sedan to tap the potential of the world’s largest auto market.

Combined sales of the Buick Envision SUV and Baojun 560 SUV surged 124%YoY in March, causing GM to shift its focus on the country’s booming SUV segment. The company announced that 40% of its new launches over the next five years will be SUVs, so that it could tap the growing SUV market.

“We will continue to launch exciting products across our brands,” said GM China President Matt Tsien. “We are pleased with our continued progress in the industry’s key growth segments.”

Demand for foreign auto maker’s luxury cars is expected to increase in the coming years. Analysts believe that with stabilization in the economy, the market will grow considerably and create room for multiple luxury auto makers. The carmaker’s brand image and value are the key factors, which will help drive the luxury market in coming years, as Chinese consumers now prefer high-end brands.

By Faraz Haleem Courtesy

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