Luxury car market in China will grow at an annual compounded rate of 12% in 2014-2020

Growth in the global luxury car market in 2015 was led by demand from China and India which have been posting double digit market growth and recovery of the European luxury car market.China became the largest auto market in the world in 2009, leaving the US behind. 

It is projected that the luxury car market in China will grow at an annual compounded rate of 12% in 2014-2020 while the overall passenger car market will grow at 8%.

Most players in the Chinese luxury car segment experienced a fall in sales in 2015. The current Chinese Government's corruption crackdown has dampened the luxury market in the country. Luxury cars, business jets and yachts are some of the sectors that have been adversely affected. 

In the first 11 months of 2015, China sold approximately 1,744,103 premium cars as compared with 912,203 units over the same period a year earlier. While 2015 second half witnessed slow growth of the luxury car market, sales have picked up in 2016.The outlook for the luxury car market in China is bright. It is expected that by 2020 China will become the world's leading luxury car market leaving the United States behind.

The Chinese luxury car market is set to benefit from the investment global players are making in the market. Local production will lead to overall advantages thereby creating a streamlined value chain within China. Benefitting from local market research to a reduction in import duties, localization is the way forward for players in China. The future in China will see players strengthening their local production facilities and launching newer models catering to the young wealthy population.