Luxury Vehicle Market In Prolonged Slowdown

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The 2018 Paris Motor Show (International Automobile, Cycling and Sports Exhibition) which ended on October 14 in Paris has left a bitter taste to the automobile industry. The main cause is the decrease of the chinese market for the first time since 1990 according to Nomura.

Par Marguerite
Ferrari Trade show in Guangzhou (China) (C) SIPA

The chinese vehicle market, international leader since 2009, is declining compared to 2017. The US brand General Motors noticed a 15% sales drop in China, while Volkswagen lost 11% since last year.

Several causes can explain this decrease. First, we should consider economics factors : the Chinese stock market has lost 50% of its value in 2018, the price of gasoline is higher than ever, and the rental market, carpool and VTC system are growing fast. In fact, Didi Chuxing, the “chinese Uber”, reached 500 million users and 10 billion orders.

Society and politics evolve for their part : traffic in towns is a major issue in China and cars are becoming less and less convenient for the inhabitants. New measures are also being taken by the governement to reduce Co2 emissions such as random draws to get a car registration document.

The Chinese luxury vehicle market is important for the western countries because China actually represents 40% of the vehicle market in the world. As a matter of fact, its situation influences a lot on the global industry. The british brand Jaguar Land Rover announced for example the closing of one of its factory because Chinese sales are low.

However, recent studies show that the market is trying to evolve. Luxury vehicle brands still invest in Asia. For exemple, Mercedes opens 75 car dealerships in 36 towns in China. Marketers then try to set up new marketing strategies to relaunch local and global sales and to satisfy consummers demands.

Par Marguerite

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The editorial team
The editorial team
Thanks to its extensive knowledge of these sectors, the Luxus + editorial team deciphers for its readers the main economic and technological stakes in fashion, watchmaking, jewelry, gastronomy, perfumes and cosmetics, hotels, and prestigious real estate.

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