Luxury segment sales soar in China last year

Nation bucks global trend in 2020 to deliver impressive growth despite the pandemic

While countries around the world struggle to contain COVID-19 and get their economies back on track, China has bucked the trend. Premium carmakers have reaped the benefits, with impressive sales results in the country for 2020.

German carmaker BMW topped the list of premium vehicle companies. A total of 777,379 BMW and MINI-branded vehicles were delivered last year in China, a 7.4 percent growth from 2019.

Jochen Goller, president and CEO of BMW Group Region China, said the carmaker is confident in the medium-and long-term development of the Chinese market and the country's economy has shown great resilience.

BMW said new energy vehicles were a highlight of its trade in the country, around 30,000 were sold last year, bringing the carmaker's accumulated sales to nearly 90,000.

The carmaker is now producing the iX3 electric SUV in China and exporting them to overseas markets.

In contrast to its record sales in China, BMW saw a double-digit fall in deliveries in the United States and Europe. The group's global sales stood at 2.32 million in 2020, which went down 8.4 percent year-on-year.

Another premium brand, Mercedes-Benz, delivered a total of 774,382 new cars to Chinese customers in 2020, an increase of 11.7 percent year-on-year. The carmaker introduced 18 new models to China last year.

The Chinese market was the first among Mercedes-Benz's global markets to demonstrate a recovery in the first half of 2020, becoming the main driver for Mercedes-Benz's global sales.

Hubertus Troska, Daimler's board member responsible for China, said: "Over the last few months we have witnessed China leading the recovery of the global auto markets. That encourages us to continue our strategy of investment, increasing our local footprint as well as co-creating and sharing business opportunities with our local partners."

Like BMW and Mercedes-Benz, most premium carmakers saw robust demand in the country.

Audi set a sales record in China in 2020 with a total of 726,288 new vehicles sold, up 5.4 percent year-on-year.

A total of 674,700 domestically manufactured Audis were delivered, up 7 percent year-on-year. Models such as A6L sedan and Q5L SUV recorded a strong performance.

Ford's premium arm, Lincoln, saw sales rise 32.5 percent on an annual basis in 2020 to a record 61,700 vehicles.

Porsche delivered 88,968 new vehicles in China last year, up 3 percent year-on-year. Its global sales declined 3 percent year-on-year.

Yale Zhang, managing director of Shanghai-based consultancy Automotive Foresight, said China has opened a "window of opportunity "for premium vehicles.

Zhang said that last year 50 percent of all car purchases were not by first-time buyers and the number reached to 60 percent in the first-tier cities. These customers would like to choose premium brands to improve driving pleasure.

With premium carmakers strengthening domestic production, introducing more models in different segments and lowering prices, customers are being provided more choices, Zhang added.

Roy Lu, director of Gasgoo Auto Research Institute, said that overseas auto markets fell sharply because of belated outbreak control. Meanwhile, China's auto market saw sustained recovery since April amid government support and a rebound in domestic demand. As a result, carmakers regard China as the stablest and most important source of global sales.

Lu forecast that the premium car market will maintain a growth of 15-20 percent this year.

He said that the pandemic is expected to affect less of the world this year and allow overseas production resumption. Therefore, more imported premium vehicles will come to China.

Premium carmakers are continuing to improve localization and introduce more new energy vehicles to echo China's regulations, Lu said.

Full-year sales in the world's biggest auto market fell 1.9 percent to 25.3 million vehicles in 2020, according to the China Association of Automobile Manufacturers.