China Luxury Car Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 154.67 Billion |
| Market Size (2029) | USD 181.49 Billion |
| CAGR (2024 - 2029) | 3.25 % |
| Market Concentration | High |
Major Players
*Disclaimer: Major Players sorted in no particular order |
China Luxury Car Market Analysis
The China Luxury Car Market size is estimated at USD 154.67 billion in 2024, and is expected to reach USD 181.49 billion by 2029, growing at a CAGR of 3.25% during the forecast period (2024-2029).
Over the long term, due to the continued rise in ultra-high-net-worth individuals (UHNWIs) and high-net-worth individuals (HNWIs) in China, the demand for luxury automobile sales may grow. Due to strong geolocation and technological shifts, particularly in China, more regional demand for high-priced automobiles has attracted new entrants to the market, resulting in new product launches. Most major luxury brands see China as the fastest-growing market.
For instance, in April 2024, Mercedes-Benz opened a new tab to launch a luxury electric van for the Chinese market based on its VAN.EA platform.
According to BMW’s annual report, China held the highest share of 32.3% in global automotive sales in 2023.
Similarly, China was the largest single market for Audi as of 2023. The company delivered a total of 729,042 vehicles (2022: 642,548 vehicles) in China, 13% more than the previous year.
E-SUVs are popular among electric passenger vehicles due to their operational capability, high-end technology, and improved safety. E-SUV has several benefits over conventional automobiles, including improved vehicle dynamics, reduced fuel consumption, and low-noise electric drive. In addition, China promotes the adoption of electric cars through subsidies, tax credits, and other incentives, leading to the exponential demand for luxury electric cars.
The German luxury car manufacturers Mercedes-Benz, BMW, and Audi are also focusing on increasing sales of their electric cars in China. For instance, in December 2023, Mercedes-Benz debuted the E Class L, the company's luxury, long-wheelbase car in China.
Considering the growth, luxury carmakers are also offering highly advanced cars by increasing their production capacities to meet the high demand in China.
In 2024, Audi announced its plans to set up a new factory in Changchun (China) to manufacture more than 150,000 models of the Q6 e-tron and A6 e-tron product lines per year for the local market.
Thus, such developments are expected to boost the market in the coming years.
China Luxury Car Market Trends
Sports Utility Vehicles Hold a Major Share
Due to its diverse landscape, China is a popular travel destination for SUV enthusiasts and brands. An SUV gives drivers the power and versatility required, whether cruising through city streets or tackling rough terrain. Popular SUVs on the market are good examples of this, as they are appropriate for the difficult roads in China.
Recently, the dominance of SUVs became a defining trend in the luxury vehicle market. Consumers increasingly favor the elevated driving position, spacious interiors, and versatility offered by luxury SUVs. This shift has led many luxury automakers to expand their SUV lineups, adapting to the evolving preferences of consumers seeking both luxury and utility.
Additionally, engine specifications are important because they determine the performance and fuel efficiency of SUVs, making them some of the best options on the market. The best SUVs in the country are outfitted with strong engines that provide ample power and torque for both off-road and city driving to meet consumer demand in China. Whether it is an internal combustion engine or hybrid or electric version, these SUVs provide various engine options to suit different tastes, demonstrating their marketability.
Considering the growth of luxury SUVs, companies are seeing growth opportunities in the segment and are focusing on various technological advancements to develop new products. For instance,
- In January 2024, Lexus, a Toyota luxury sub-brand, officially launched the next-generation GX luxury hardcore off-road SUV in China, which is available in three 550h variants, with prices ranging from CNY 778,000 to CNY 888,000.
These cars provide a more secure and assured driving position, making one feel more confident while driving. SUVs are also well-known for their off-road ability and fuel efficiency, which makes them a sensible option for drivers in China who frequently deal with difficult road conditions.
These factors, coupled with high disposable income, rising brand awareness, and high-power purchase parity, contribute to the segment’s growth.
The Electric Vehicles Segment is Expected to Reach the Next Growth Level
Initiatives taken by the Chinese government to boost electric mobility and increase the sales of luxury cars in the country also helped sales growth and attracted new investments. In terms of policy and taxation reforms, the country is considering a tax cut to revive its weakened automotive market. The tax cut may aid China in supporting its automotive industry. For instance,
China has extended its tax exemption policy for new energy vehicles (NEVs) until 2027, focusing on promoting the EV industry.
Moreover, with growing sales and production of electric cars, the Chinese automotive industry has been witnessing exponential growth Y-o-Y, with the world's largest electric mobility market. For instance,
According to the World Economic Forum, Chinese automakers account for more than half of the electric vehicles (EVs) produced in the world.
The government allows international automakers to set up more than two joint ventures in the country. Most international players already have more than two joint ventures with their Chinese partners. Additionally, they can set up wholly owned companies in the country. These conditions create opportunities for other luxury brands to tap into the market.
Considering the future of electric vehicles, the major luxury OEM companies, which include BMW, BYD, and Lexus, are investing majorly in new technology, establishing supply chains, and increasing production capacity for EV production and various components of EVs, such as battery packs and motors.
In April 2023, at the Auto Shanghai 2023, Lexus presented a range of electric vehicle models, including the RZ 450e, RZ Sport Concept, and RZ Outdoor Concept, with different lifestyle solutions.
Of the top 10 best-selling EVs, half of the brands are Chinese, led by BYD, which trails only Tesla in global market share and is beginning to ship its electric vehicles abroad. The Chinese battery manufacturers, namely CATL and BYD, are the industry's biggest players, and Beijing controls access to critical raw materials.
Thus, such factors are contributing to the growth of the electric vehicles segment.
China Luxury Car Industry Overview
The Chinese luxury car market is consolidated and led by global and regionally established players. These companies adopt strategies such as new product launches, collaborations, and mergers to sustain their market positions. For instance,
In January 2024, the new BMW 5 Series Sedan and the new BMW i5 were launched in China. The new edition of the Business Sedan is expected to be available in China for the first time with both highly efficient combustion engines and all-electric drive.
Some of the major players in the market include BMW, FAW Group Co. Ltd, Infiniti, BYD, Geely, Toyota Motors, and Tesla.
China Luxury Car Market Leaders
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Lexus (Toyota Motor Corporation)
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Daimler AG (Mercedes-Benz)
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Volkswagen Group (Audi AG)
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Zhejiang Geely Holding Group
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BMW AG
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Lexus (Toyota Motor Corporation)
*Disclaimer: Major Players sorted in no particular order
China Luxury Car Market News
- April 2023: At Auto Shanghai 2023, Lexus celebrated the world premiere of the all-new Lexus LM. Beginning with China's key luxury MPV market, the company announced that the second-generation LM will be launched in over 60 countries worldwide. The 6- and 7-seat versions focus on a spacious feel and excellent visibility, with expansive trim and overhead consoles throughout the cabin to create a personal feel for all passengers.
- May 2024: Volkswagen AG’s Audi and China’s SAIC Motor Corp. Ltd partnered to work on a new vehicle platform and three new pure electric models to launch in the Chinese market. The three BEV models will cover B and C segments to focus on China’s fast-growing electric vehicle market. These models are expected to be launched in 2025.
China Luxury Car Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Drivers
4.1.1 Growing Trend of EVs is Expected to Drive the Market
4.2 Market Restraints
4.2.1 High Cost of Luxury Vehicles May Hamper Market Growth
4.3 Industry Attractiveness - Porter's Five Forces Analysis
4.3.1 Threat of New Entrants
4.3.2 Bargaining Power of Buyers/Consumers
4.3.3 Bargaining Power of Suppliers
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION (Market Size in USD Billion)
5.1 By Vehicle Body Style
5.1.1 Hatchbacks
5.1.2 Sedans
5.1.3 Sports Utility Vehicles (SUVs)
5.1.4 Multi-purpose Vehicles (MPVs)
5.2 By Powertrain Type
5.2.1 IC Engine Vehicles
5.2.2 Electric Vehicles
6. COMPETITIVE LANDSCAPE
6.1 Vendor Market Share
6.2 Company Profiles
6.2.1 Mercedes-Benz AG
6.2.2 Volkswagen Group (Audi AG)
6.2.3 Zhejiang Geely Holding Group
6.2.4 BMW Group
6.2.5 Lexus (Toyota Motor Corporation)
6.2.6 General Motor Company
6.2.7 Tesla Inc.
6.2.8 Dongfeng Motor Company
6.2.9 Infinity (Nissan Motor Co. Ltd)
6.2.10 Acura (Honda Motor Co. Ltd)
6.2.11 Cadillac (General Motors Company)
6.2.12 China FAW Group Co. Ltd
6.2.13 Lincoln Motor Company (Ford Motor Company)
6.2.14 JAGUAR LAND ROVER LIMITED (Tata Motors Limited)
- *List Not Exhaustive
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
China Luxury Car Industry Segmentation
A luxury car offers higher comfort levels, equipment, amenities, quality, performance, and associated status than a mid-priced car. The scope of the report covers details about recent developments, trends, and technologies in the market.
The market is segmented by vehicle body style and powertrain type. By vehicle body style, the market is segmented into hatchbacks, sedans, sports utility vehicles (SUVs), and multi-purpose vehicles (MPVs). By powertrain type, the market is segmented into IC engine vehicles and electric vehicles.
The report offers market size and forecasts in terms of value (USD) for all the above segments.
| By Vehicle Body Style | |
| Hatchbacks | |
| Sedans | |
| Sports Utility Vehicles (SUVs) | |
| Multi-purpose Vehicles (MPVs) |
| By Powertrain Type | |
| IC Engine Vehicles | |
| Electric Vehicles |
China Luxury Car Market Research FAQs
How big is the China Luxury Car Market?
The China Luxury Car Market size is expected to reach USD 154.67 billion in 2024 and grow at a CAGR of 3.25% to reach USD 181.49 billion by 2029.
What is the current China Luxury Car Market size?
In 2024, the China Luxury Car Market size is expected to reach USD 154.67 billion.
Who are the key players in China Luxury Car Market?
Lexus (Toyota Motor Corporation), Daimler AG (Mercedes-Benz), Volkswagen Group (Audi AG), Zhejiang Geely Holding Group, BMW AG and Lexus (Toyota Motor Corporation) are the major companies operating in the China Luxury Car Market.
What years does this China Luxury Car Market cover, and what was the market size in 2023?
In 2023, the China Luxury Car Market size was estimated at USD 149.64 billion. The report covers the China Luxury Car Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the China Luxury Car Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
What trends are influencing the China Luxury Car Market?
Key trends that are influencing the China luxury car market are a) Increasing adoption of electric vehicles (EVs) b) Integration of advanced technologies like Artificial Intelligence (AI) and Internet of Things (IoT) c) Growing emphasis on sustainable and environmentally friendly vehicles
What are the key challenges faced by the China Luxury Car Market?
Major challenges faced by the China Luxury Car Market are a) Regulatory pressures, especially related to emissions and vehicle imports b) Intense competition in the market c) Need to adapt to rapidly changing technology
Luxury Cars in China Industry Report
The Chinese luxury car market is experiencing significant market growth, driven by an increase in disposable income and a growing appreciation for the benefits of luxury vehicles, such as improved resale value, prestige, and cutting-edge technology. The market segmentation encompasses various vehicle body styles, including hatchbacks, sedans, SUVs, and MPVs, as well as different powertrain types like IC engine vehicles and electric vehicles. The industry's market size and market value are expanding, with a notable shift towards electric vehicles, supported by government sustainability initiatives.
The market overview highlights the integration of AI and machine learning, which is enhancing vehicle performance and safety, making Chinese luxury car brands more appealing within the premium car industry. Additionally, strategic collaborations among manufacturers are fostering innovation and refinement in luxury car offerings, aligning with evolving consumer preferences and technological advancements.
For those interested in detailed industry analysis, market data, and industry statistics, comprehensive reports are available. These reports provide a thorough market forecast, industry outlook, and market predictions, offering valuable insights into the industry's trends and growth rate. The Chinese luxury car market is poised for continued expansion, driven by both domestic demand and global market dynamics.
China Luxury Car Market Report Snapshots
