Chinese luxury car makers are making big strides in the world’s second-largest car market, the leading sources said Thursday, adding that a growing number of people are embracing cars that are less costly than the more expensive models.
The rise of luxury brands such as Mercedes-Benz, BMW and Cadillac is also driving up sales of the most expensive cars, which account for about a third of total global sales, according to a report by the U.S.-based automotive consultancy Kelley Blue Book.
More than 80 percent of cars sold in China in 2016 were imported, making them more expensive than cars sold domestically.
In China, there are more than 300 luxury car brands, with some of the world top five being Audi, BMW, Mercedes- Benz and Volvo.
The growth of luxury car sales is in stark contrast to the domestic market, where Chinese car makers were struggling in recent years with low demand and high sales costs.
The growth of high-end luxury brands has helped boost sales and boost profits.
Chinese luxury car manufacturers are now building cars that cost as little as $5,000, which is well below the $20,000 mark that is the average price of a new car in the U-21 world.
They also are turning to China for parts, including parts for the Mercedes-AMG and Mercedes-Powered SUV.
The number of Chinese luxury cars sold rose 20 percent in the first quarter of this year, said Zhou Gui, a senior analyst at Kelley Blue Books.
The U.K.-based car-market consultancy Edmunds said the growth of Chinese cars is helping to drive sales and profits in China.
“In 2016, Chinese luxury sales jumped 70 percent to 3.7 million units, up 17 percent from the previous year, the largest year-over-year increase since China began collecting data in 2010,” Edmunds’ senior director of research, Andrew Pritchard, said in a statement.
In 2016 there were 3.4 million luxury car registrations in China, up 14 percent from 2015, according a report from the Beijing-based Institute of Automotive Research.
China is also the largest buyer of luxury cars globally.
The Chinese carmakers have seen a surge in orders for luxury cars, especially in cities such as Beijing and Shanghai.
Chinese buyers have also spent more than $3 billion on luxury goods last year, up from $1.2 billion in 2015, the report said.