Flourishing luxury car market edging out China’s cheaper domestic brands

Twenty years ago China’s roads were a sea of locally made vehicles, motorbikes and pedal bikes. The country’s car market has flourished since then, attracting huge investment from domestic and foreign firms. In the past decade, the number of cars sold has rocketed from around 2 million to nearly 20 million a year.

While this boom was fuelled by sales of cheap local vehicles, the luxury car market has also taken off. Most of the major luxury brands see China as their fastest-growing – and often the largest – market.

British brand Jaguar Land Rover (JLR) is one such example. From a small presence a few years ago, 2014 saw the opening of its first manufacturing facility in China. The award-winning Range Rover Evoque will be the first model to be built under the first Chinese-British automotive joint venture, with Chery Automobile.

“The opening of this world-class facility is an important milestone for Jaguar Land Rover,” CEO Dr Ralf Speth said at the plant inauguration. “Since its launch, one in five Range Rover Evoques have been sold in China. Our decision to manufacture the Range Rover Evoque in Changshu is a result of our commitment to bringing more Chinese vehicles to Chinese customers.”

JLR sold more than 100,000 vehicles in China last year, making it the firm’s largest single market.

Despite high import taxes, China’s largest cities are awash with Ferraris, Lamborghinis, Bentleys and other top models. Bugatti has even sold a number of its Veyron hypercars in China, which cost from 25 million yuan (HK$31.5 million) to 38 million yuan each – the iconic brand also has its only museum in China.