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China’s Lack of Brand Loyalty Helping German Automakers

Study shows buyers looking to upgrade plan to buy German cars.

by on Sep.18, 2014

Buyers in China looking for a luxury brand lean toward German makers, such as BMW.

Chinese consumers are proving as fickle as their counterparts in the United States, according to a new study by the Boston Consulting Group, and that may be good news for German car brands there.

Roughly 40% of the owners of cars from Chinese makers planning to trade their vehicle for a global or “foreign” brand said they intend to buy a Volkswagen model. Nearly 90% of foreign volume-brand owners who are trading up said they are likely to buy an Audi, BMW or Mercedes-Benz, according to the group, known as BCG.

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China remains the world’s largest automobile market with sales expected to top 21 million units this year, dwarfing sales in the U.S., Western Europe and Japan, the industry’s traditional key markets. (more…)

Cadillac ATS Lands in China

Luxury model joins XTS in Asian line-up.

by on Nov.27, 2013

The Cadillac ATS makes its Chinese debut.

Hoping to build momentum in what is rapidly becoming the world’s largest luxury car market, Cadillac is introducing its compact ATS model into China where it will join the bigger XTS model introduced earlier in the year.

For now, however, the smaller of the two luxury cars will continue to be imported from the U.S. which means buyers will have to pay a premium in the form of import duties. Caddy began producing the XTS model in China this year.

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The ATS, which Cadillac bills as a luxury sports sedan, is making its official debut at the Auto Guangzhou 2013 car show in Southern China. The imported model will be offered in four trim levels along with five exterior and two interior color options, and will be priced from $52,000 to $72,000, General Motors officials said.


Daimler Redoubling Efforts to Make up Lost Ground in China

German maker spending $2.7 billion to catch rivals.

by on Aug.29, 2013

Daimler's China chief, Hubertus Troska, recently laid out the company's plans to grow sales in China.

Daimler AG, in a bold effort to catch its German rivals Audi and BMW, plans to sink $2.7 billion in China, starting with a new plant.

The plant is scheduled for completion as early as 2014 and will help Daimler double China production to more than 200,000 units a year, according to Hubertus Troska, who was appointed last fall to reorganize the company’s China operations. Since then, he merged the company’s two distribution arms in China and set up a support unit to coordinate marketing, sales and training initiatives in the country.

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China is set to become Daimler’s largest market as soon as 2015, Troska said. (more…)

China Set to Become BMW’s Top Market this Year

Will surpass U.S. as China becomes world’s largest luxury car market.

by on Jul.12, 2013

China is set to become BMW's top market this year.

By most accounts, China is expected to become the world’s largest market for luxury cars before the end of the decade. But BMW is apparently in a rush there and expects the booming Asian nation to overtake the U.S. as its lead market by the end of 2013.

Locked in a three-way global battle with German competitors Mercedes-Benz and Audi, all three have been pushing hard to win over the growing number of affluent Chinese motorists, and BMW’s gains have so far this year run well ahead of the overall growth of the Asian market, driven by the arrival of new products such as the latest-generation 5-Series.

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As a result, Chinese sales already exceeded demand in the U.S. for the first half of 2013, noted Karsten Engel, who oversees BMW’s China operations, and should maintain that lead for the rest of the year.


China Soon to Be World’s Top Luxury Car Market

Sales of premium models expected to double by 2020.

by on Jun.04, 2013

The new Cadillac XTS gets a splashy launch during China's annual auto show.

It would be tempting to say that James Wang is living the American dream – if it weren’t for the fact that he’s living in Beijing.

The mild-mannered 27-year-old is a self-made mega-millionaire, earning his money building golf courses for the country’s fast-growing leisure class. And like so many of his American counterparts, the young entrepreneur is addicted to automobiles, with a fleet of vehicles ranging from a Subaru WRX STi to a Porsche 911 and even a Maybach M62 in his garage.

While Wang may have a slightly larger personal fleet than most Chinese motorists he’s far from unusual in his taste for premium automobiles.  Luxury cars today fill the streets of many booming Chinese cities, notes Fu Qiang, president and CEO of Volvo Cars China, noting that “All the forecasts call for China to become the world’s largest premium market by 2016.”

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The country is already the largest national automotive market in the world, pushing past the U.S. several years ago. And Chinese industry groups have estimated overall annual demand could surge to 38 million in little more than a decade, exceeding sales in the U.S. and the European Union combined.


Mercedes Increasingly Desperate to Reverse Losses in China

Share slips as Audi, BMW come on strong.

by on Apr.10, 2013

The Mercedes CLA Concept debuting in Beijing last year. The production version could be critical for the maker's revival in the Chinese market.

Mercedes-Benz continues to lose ground in China’s booming premium car market to arch-rivals BMW and Audi — but Daimler AG’s top executive, Dieter Zetsche, told the company’s shareholders meeting the automaker is confident it can make up the ground it has lost in recent months.

Mercedes’ slide has been both acute and unexpected and the maker has struggled even after slashing prices on key models such as the flagship S-Class sedan. That’s particularly worrisome since many analysts expect China will soon become the world’s largest market for luxury vehicles, surging past the U.S.

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Zetsche admitted to shareholders that Daimler management is keenly aware it has failed to keep pace with the growth in China. “Our sales had increased rapidly for five years in a row. During that period we posted the strongest average growth of all the premium brands there. Last year, our business expanded only slightly and we lost market share. We have to change this situation and we will.”


Audi Aims to Topple BMW as Luxury Sales Leader

Targets 2 mil annual sales; big surge in new products critical.

by on Mar.12, 2013

Audi CEO Rupert Stalder introducing the A3 e-Tron at the Geneva Motor Show last week.

Fresh off its strongest year ever, Audi AG is taking aim at German rival BMW AG and promising to become the world’s largest luxury automotive brand.

The maker is planning to invest more than $14 billion through 2015 to support its ambitious goals, funding a product program that will cover the increasing breadth of the luxury segment, from the small A3 hatchback to an assortment of new crossover-vehicles, such as the planned Audi Q6, said CEO Rupert Stadler. It also is investing in a number of new assembly plants, including one planned for Mexico.

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“There are years in which to harvest in our industry and there are years in which you sow,” said Stadler at Audi headquarters in Ingollstadt, Germany.  While the cost will be significant, the payoff should come by 2020, when the executive added, “we are preparing to (sell) two million cars annually.”


China Set to Become Globe’s Top Luxury Car Market

But there could be unexpected obstacles.

by on Mar.06, 2013

Mercedes opened the world's first standalone AMG Performance Center in Beijing.

Demand for luxury vehicles in China will make it the world’s second-largest market for expensive vehicles by 2016, and number one by decade’s end when it will likely surpass the U.S., according to a new study by the consulting firm of McKinsey & Co.

But industry analysts and planners caution that several obstacles could delay or completely short-circuit the boom in automotive demand in China, both on the mainstream and luxury level.

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Sales of premium vehicles will probably equal that of all of Western Europe by 2020, as incomes continue to rise in what is now the world’s second-largest economy, according to McKinsey & Co. China is already the largest automotive market in the world overall.


Jaguar Land Rover Teaming up with China’s Chery

Too little too late?

by on Mar.22, 2012

Jaguar and British sibling Land Rover have inked an alliance with Chery Automobile to produce cars in China.

British maker Jaguar Land Rover is the latest to ink a deal with a Chinese partner – but with signs the Chinese market may be slowing, the question is whether the move is too little too late.

The new partnership with China’s ambitious Chery Automobile Company will lead to the production of both Jaguar and Land Rover vehicles, as well as powertrains, at a facility in the booming Asian market – which has outsold the U.S. for the last several years.

But the specifics have yet to be announced and will be subject to approval by Chinese regulators – a process that can drag on for some time.  Fuji Heavy Industries has been waiting since last year for the go-ahead on a deal that would lead to production of its Subaru line in China.  Nonetheless, officials at India’s Tata Motors, which owns JLR, expressed optimism.

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“Demand for Jaguar and Land Rover vehicles continues to increase significantly in China and we believe that JLR and Chery can jointly realize the potential of these iconic brands,” Jaguar Land Rover CEO Ralf Speth, said in a statement.


China Driving Audi as it Leapfrogs Mercedes-Benz

But U.S. still critical market for VW luxury division.

by on Apr.12, 2010

With products like the new Audi A1, the German automaker hopes to maintain its lead in the global luxury sales sweepstakes.

As it expands its lead as the world’s largest auto market, China is changing not just the rules but realigning the pecking order of the global auto industry.

For the first time, this past quarter, Mercedes-Benz saw itself slip into second place on the global luxury sales charts, behind upstart Audi, the Volkswagen AG subsidiary that has become the dominant high-line player on the Chinese scene.

But despite decades of struggle, Audi continues trying to reposition itself as a leader, rather than an also-ran in the U.S., now the globe’s second-largest auto market. And company officials say they may be in for some gains – if they can just get the factory to provide American dealers with more product.

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For the first three months of 2010, it seems, Audi hit a record 264,100 vehicles worldwide, compared with just 248,500 for Daimler AG’s Mercedes brand.  If the Volkswagen subsidiary can maintain that momentum it could exceed its five-year goal of becoming the world’s largest luxury brand.  The original target was 2015, when Audi had hoped to boost sales to a whopping 1.5 million units annually.