Global automakers, relying on their Chinese JVs to oversee sales in China, have begun to take sales in their own hands.
Daimler which has tried for years to surpass rivals Audi and BMW in China, has increased its stake over the past months in both its Chinese JV sales operations. The automaker’s stake in Mercedes Benz China has increased to 75% and controls 51% of Beijing Benz Automotive. In the last three years, other automaker such as Ferrari, Volvo, Bentley, Porsche, Land Rover and Jaguar have set up in China their own wholesale operations.
John Zeng, Asia Pacific director of LMC Automotive, says that automakers are eager to take over sales as China has become one of their top three markets globally or even their largest market. Auto sales here continue to increase by 5% and even 10% annually. The fact that this market offers more profits compared to any other luxury market is another reason for the need of control.
“By controlling sales, global brands can expand their footprints in this market as fast as they like,” Zeng said.
Analysts predict that premium auto sales in China will surpass those in the US by 2016 and Western Europe by 2020.