 |
| SEMA members participating in the first SEMA CIAPE China Business Development Conference examine a customized Jeep at the CIAPE show. |
Vehicle sales in China are growing across the board, but the luxury and SUV segments are increasing at the fastest rate, propelled by rising incomes and a wave of second-car buyers with a desire for something more upscale. That’s just one trend that bodes well for SEMA members eyeing the China market for future sales.
First, the big picture. China’s passenger-car market was the world’s largest in 2010. It grew by 33.17% compared to the previous year to 13.76 million units, according to the China Association of Automobile Manufacturers (CAAM). J.D. Power and Associates forecasts China’s passenger-car market will hit 20.9 million units by 2015. That includes cars, SUVs and MPVs.
“The luxury-car and SUV segments are gaining share in recent years, especially from 2008,” Jenny Gu, a senior analyst with J.D. Power in Shanghai, told SEMA. “One major reason is that the percentage of second-time buyers is increasing, and their first choice is an SUV or a luxury car.”
In 2010, SUVs accounted for 14% of the passenger-vehicle market; that will grow to 16% by 2015. Luxury cars accounted for 3.8% of the market in 2010; that will grow to 4.7% by 2015.
Based on new-vehicle registration data, SUV imports accounted for 51.7% of all imports in 2010, says Fourin’s China Automotive Intelligence Report No. 24, December 2010.
Why SUVs?
“These models offer great performance on rough roads and higher safety than ordinary passenger cars,” says the report.
More than half the buyers of imported cars in China were young, rich men. Some 66.8% of the buyers were male; 88.3% used cash; more than 90% were private owners; and men in their 30s and below accounted for 55% of the total, making China’s luxury-car purchase group the world’s youngest, said Fourin. The largest portion of the imported cars—some 34.6%—cost more than 500,000 RMB, ($75,900 USD).
Rising incomes in China’s tier-one and tier-two cities make them especially hot markets for luxury cars, said Gu. Residents in smaller cities are also developing an appetite for luxury cars, however, and manufacturers, such as Mercedes-Benz and BMW, are adding dealerships there.
Of China’s luxury-car consumers, J.D. Power’s Gu said: “When demand becomes more diverse, some customers pursue trendy or niche markets. They like to be special, especially for those young elite or those who come back from foreign countries. They prefer import models. One reason is the design is the global trend. Also, there is a sense that the quality is better than locally produced models.”
SEMA is sponsoring a members-only trip to Beijing, China, September 7–10, 2011. Participants will have the chance to network and meet one-on-one with distributors and retailers of specialty products from throughout China.
For more information, visit sema.org/china or contact Linda Spencer at lindas@sema.org.