As competition in the luxury segment in the world’s largest automotive market continues to grow, remedy premium automakers seek to lower the age base of their clients, purchase tapping into the big resources offered by China’s expanding youth base.
Back in the day, luxury cars were viewed as the panache of old and accomplished American or European buyers – with the automakers complying and developing the cars with them in mind. Now, the situation is quite different – as emerging markets explode, so does the number of buyers who can afford a luxury car and are younger.
So, carmakers from Mercedes and Infiniti or Audi to Lincoln are on a race to make smaller, sportier models for rich and young Chinese buyers. But the situation applies also to other markets, like the US.
“The megatrend for us in China will be compact cars,” said Martin Keuhl, head of corporate communications for Audi China. “It’s not so status-driven in the sense that ‘big is beautiful.’ Now you can have a good car that is small. Younger people also are more open to this.”
While in China the overall market growth is expected to increase on a 8 to 10% base, slightly slower than last year’s 15.7%, analysts, like Zhu Bin of LMC Automotive, say the luxury sales will still grow by 21% to 24%. And China’s average customer is now 10 to 15 years younger than in the West, with the percentage of buyers who increasingly drive themselves instead of having a chauffeur also on the rise.