By on March 4, 2013

Bloomberg, which is relentlessly covering the luxury end of the car market for its high net-worth subscribers, has the distressing news that Chinese will buy more luxury cars than Americans – by 2016, that is.

This will happen if the Chinese do as a McKinsey study says. It says that “China premium car sales will probably surpass the U.S. as early as 2016 and equal that of Western Europe by 2020, driven by rising incomes in the world’s second-largest economy.”

Demand for luxury vehicles in China is expected to more than double by 2020 to 3 million from the 1.25 million cars sold last year, the study says. McKinsey sees deliveries of premium cars reach 2.25 million by 2016.

This is good news for German makes, led by Audi, which currently own “about 80 percent” of the segment in China, McKinsey says. It is also good news for Cadillac, Lincoln, Infiniti, Lexus, et al who want a slice of the juicy pie.

But remember what Susan Docherty said:

If a luxury brand is successful in Europe, whether that brand is Chanel or Prada, or Mercedes or BMW, people in parts of Asia look to see what Europeans validate as true luxury.”

If that’s true, then the doubling of the higher end market in China probably will benefit those other Germans, Docherty, said it, BMW and Mercedes.

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12 Comments on “McKinsey Report Says: China To Beat U.S. In High End Cars...”


  • avatar
    mike978

    Wow Audi having an 80% market share. That is not going to be sustainable long term given the number of competitors who want a slice of the pie. 50% seems generous going forward. Still very good for the VW group.

  • avatar
    lowsodium

    Thats assuming Chinas real estate bubble doesnt bust spectacularly before then.

    • 0 avatar
      blowfish

      ve cannot just listen to predictions or else ve mind as well read your daily hororscope, ask dear abby and psychic madamme cleo.

      the unpalatable truth to the lo oi , occidentals, foreign devil, le blancs or whatever u name for them middle kingdom is getting bigger fatter by the seconds. which most western countries either wish mk is going to disappear into the giant sink hole or become oblivion.
      a number of things they did right, as they spend what they can afford and able to hoard $$ or tighten their belt when its needed.
      If uncle sam’s wall street dudes and eu’s irresponsible bankers hadn’t pull all these good times schemes mk wouldn’t be so as strong now.
      so in a way the lo ois aka occidentals did helped china to achieve stardom in the last few yrs.

      or look at the couple of middle east wars did to us of a?

      if ve can go back time atleast lehman’s bro should have been saved at all costs, the damage was totally unfathomable, not much different than crysler was being saved 30 some yrs ago.

      • 0 avatar
        George Herbert

        Blowfish writes:
        “ve cannot just listen to predictions or else ve mind as well read your daily hororscope, ask dear abby and psychic madamme cleo. the unpalatable truth to the lo oi , occidentals, foreign devil, le blancs or whatever u name for them middle kingdom is getting bigger fatter by the seconds.”

        Yeah, no. I have nothing against China’s economic rise in general. I think the big concern at the moment is a combination of:

        A) legitimate fears that the rest-of-the-world slowdowns had more effect on China than previously fully acknowledged;
        B) fear of China’s residential real estate bubble bursting badly;
        C) fear that other sectors of China’s economy overcooked and are bubbling now as well.

        This is nothing related to “Fear of rise of the east”. If Foxconn’s rehiring after Chinese New Year is down, there remain hundreds of thousands or millions of empty premium residential units (and whole developments, and regions) around some of China’s bigger cities, and so forth, the odds that there’s a problem are significant.

        China’s economy and standard of living rising are good things for its people, its national standing, world stability, and the rest of the world (including the US economy). Being afraid of that is a cheap stupid politician move. This is legitimate economic fear of legitimate problems, which would be a net negative to the US, not a positive.

        • 0 avatar
          blowfish

          is as difficult to ask whether the chicken or the eggs comes first.

          MK , EU and US of A’s economies are all intertwined, neither one will do well if the other is sputtering.
          one thing we did saw as GM didnt went totally tits up after the re-organization as GM sold a good amount of cars in MK.

          “B) fear of China’s residential real estate bubble bursting badly;”
          that all depends on how much these folks have leveraged their deals.
          Too little equity will not weather any storm at all.

          “If Foxconn’s rehiring after Chinese New Year is down, there remain hundreds of thousands or millions of empty premium residential units”

          the folks who work at Foxconn will never afford those premium res units anyways. should they be out of work they will have to go back to plow the fields again.
          How well FC will do isn’t that depends how well the west buy the next new gen apple I products?
          thats why most of us pray to God bless America.

  • avatar
    Volt 230

    Anyone surprised by this has been keeping his head in the ground like an ostrich, the transfer of wealth West to East has been going on for so long that this is just the tip of the iceberg, it is happening with things like wine. art and other things that ultra rich people like to own.

    • 0 avatar

      Indeed, and it’s not just the “ultra rich”, but many long-established luxury goods in general. There is a reason that Rolex is cranking out more watches than ever in its history, and a reason that grape-growers in Champagne are struggling to increase output from already-crowded vineyards, just to cite two examples, and those reasons are that suddenly there are a lot of Chinese folks with money who want much of the same good stuff that their Western counterparts have wanted for a while.

      • 0 avatar

        I just got off the phone with a good friend of mine, a Hong Kong wine importer. He says that the quantities of Champagne imported to China are rather small, and they PALE in comparison with French bubbly being shipped to Japan.

    • 0 avatar
      tatracitroensaab

      This article and this comment are a part of a western attitude that disgusts me. China has a billion people, it should be buying A LOT more luxury cars than Americans there is nothing wrong with the economic rise of china — it and the rest of the developing world are catching up to the west, as they should. It should be noted that for most of human history, the dominant power has been china, mostly because it’s in a very fertile part of the earth and has thus always been home to more people than almost anywhere else. The west only ascended in the last 500 years with the advent of global trade, which Europe was able to take the lead in, and the gap only widened thru industrialization. Now the rest of the world is catching up.

      Demagogues like to stir people up by pretending that this is all zero sum — that more luxury cars in china, or anything else, comes at the expense of Americans. This simply is not true. While yes the world has in theory finite resources, in practice one country’s rise to prosperity is a win-win game. China gets rich, great, now we have someone who can use our services, buy our products, adapt our ways, etc. etc. and vice versa

  • avatar
    blowfish

    or 30 yrs ago folks in old blighty wasn’t thrilled about harrods changed to harab!

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