Even in the aftermath of the corona crisis, luxury car sales in China reached a record high. China’s economy continues to grow and demand for luxury cars has increased, and the Chinese luxury car market is expected to grow by 15-20% this year. Hyundai Motor (005380)It is also planned to launch the luxury brand Genesis this year to capture this growing market, but an analysis says that competition will be tough as global automakers are already in place.
According to China Daily, the state-run China Daily on the 22nd, BMW sold 777,000 units in China last year. Sales volume increased by 7.4% year-on-year, but considering that BMW’s global sales volume (2.32 million units) decreased by 8.4% year-on-year last year, sales in China are said to be surprising. The sales volume of Mercedes-Benz and Audi in China also surpassed 770,000 and 720,000, respectively, up 11.7% and 5.4%, respectively, compared to the previous year. Porsche sold nearly 90,000 units, while Lincoln sold more than 60,000 units, up more than 30%.
Provided BMW SUV iX3./BMW produced in China factory
Thanks to the government’s support and domestic demand recovery, Chinese auto sales have continued to recover since April of last year. Accordingly, global luxury car makers began to catch Chinese consumers by strengthening local production in China and releasing a large number of new models. In line with the regulatory environment of the Chinese government, which is in a hurry to convert electric vehicles, it has also hurried to introduce eco-friendly cars.
In July 2019, BMW decided to set up a joint venture for the production of electric vehicles with China’s Changcheng Motor Company. Is, of course, decided to supply to the global market. Daimler, the parent company of Mercedes-Benz, referred to China as a manufacturing and export hub when it decided to cooperate with Geely to develop a next-generation hybrid powertrain. Lincoln has been producing premium sports utility vehicle (SUV) corers in China since 2019.
Thanks to this, China has become the most stable and important market for global automobile sales. “For the past few months, China has been leading the recovery of the global automobile market,” said Daimler’s Chinese President Hubertus Troska. “Daimler will continue its investment strategy in China and expand its presence in the local market.” .
Although the Chinese luxury car market is growing rapidly, Hyundai has not even started. Hyundai Motor Company introduced the Genesis brand at the China International Import Fair (CIIE) held last year to launch the Genesis brand this year, but the launch schedule was delayed due to the corona crisis. In particular, Hyundai Motor Company is currently experiencing a severe sluggish sales in the Chinese market, so the launch of the Genesis brand is expected to be an opportunity for a turnaround.
Genesis introduced by Hyundai Motor Company at CIIE in China in 2019. / Provided by Hyundai Motor Company
However, there are concerns that Genesis is in an environment where it is difficult to receive great attention in the Chinese market as luxury brands in North America and Europe have already entered the Chinese market and are expanding their territory, and they are competitive in price as well as establishing local production bases. As China imposes over 20% tariffs on imported cars, Genesis’ price competitiveness is inevitably lower than that of other global models produced in China.
