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Jan
2016

The Top 10 Best Selling Luxury Cars in China: JLR retains fourth position but with a negative growth rate

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According to recent data released by major auto manufacturers, the top 10 luxury car brands in China during the first three quarters of 2015 are shown below. The sales performance shows two extremes: Benz, Porsche and Infiniti all achieved over 30% growth during this period of 2015, while Jaguar Land Rover dropped by 29%. Overall sales grew by 5.18% y-o-y for these ten brands’ during this period.

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The inclusion of the Citroen DS product range in the top 10 is an indicator that a well styled ‘sexy’ vehicle is considered luxurious from any foreign brand, no doubt it relatively low retail prices have also helped lift its acceptance.

JLR commented that the decrease in sales was due to the late promotion of their new model of Discovery Sports and Jaguar XE. Sales of new models in the UK, North America and Europe were good at 17%, 22% and 21% respectively, and will help the sales in China too. Its view was also that generally performance in China was not bad.

However, commentators observed that the product recalls and frequent poor media exposure in terms of its quality issues attribute to the decrease. Up to December 14th this year, JLR had made nine announcements on the Defective Product Administrative Center website, a branch of the Administration of Quality Supervision, Inspection and Quarantine, recalling a total of 133,468 vehicles, including Range Rover, Range Rover Sports, Discovery 4, Range Rover Evoque, Jaguar XK and Jaguar XF models.

Unfortunately the JV between JLR and Chinese car maker Chery has negatively impacted the reputation of JLR among Chinese consumers. As its most popular model Range Rover is now also manufactured in China, some people consider this as a disadvantage when showing their own status. Hence they choose other models and even other brands to avoid the confusion between domestic cars and imported ones. For others, although the place of production doesn’t matter to them, the price of the domestic Range Rover is at the same level of imported ones because Chery can only assemble 50% of the vehicle locally and must import the remaining 50%, therefore domestic Range Rovers are not able to compete on price with other domestic products. As a result, the high-priced domestic Range Rovers have sold poorly. Although price adjustments have already been made, this probably will not help attain the 2015 sales goals.

By comparison to JLR, Porsche, Infiniti and Benz all increased sales by over 30%. The CEO of Porsche China, Franz Jung, said China is the biggest single market for Porsche now, and the fourth biggest market for its 911, Boxster and Cayman models.

A phenomenon seen in the luxury fashion sector where Chinese consumers have started to look for niche brands and try to be more individual not wanting to align themselves with mainstream consumers, there appears to be a similar trend in the auto market as consumers move from the more traditional luxury brands like Audi, to more individual names and products such like those of Porsche.

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