Sales of High-End European Cars Sink in China

Chinese demand for foreign luxury cars is waning as buyers increasingly opt for more affordable Chinese brands, often sold at steep discounts and tailored to consumer preferences for advanced electronics and comfort, Chan Ho-Him reported for the Associated Press (AP).

A prolonged property downturn has dampened appetite for big-ticket purchases. (Photo: Aston Martin Facebook) 

That trend is bad news for European automakers such as Porsche, Aston Martin, Mercedes-Benz, and BMW, which have long dominated the upper end of the world’s largest auto market.

A prolonged property downturn has dampened appetite for big-ticket purchases, while wealthier consumers are becoming more reluctant to publicly display their affluence, said Paul Gong, head of China automotive industry research at UBS.

Many buyers have also been swayed by a 20,000-yuan ($2,830) government trade-in subsidy for electric and plug-in hybrid vehicles.

Consumers tend to choose cheaper, entry-level models where the discount has a greater impact — and those vehicles are mostly Chinese-made, Gong said.

“Slowing economic growth is one key driver behind weaker demand for premium cars,” said Claire Yuan, director of corporate ratings for China autos at S&P Global Ratings, referring to brands such as Mercedes-Benz and BMW.