A car exhibition in southwest China's Yunnan province. (File photo/Xinhua)
China is expected to surpass the United States to become the world's largest consumer of luxury cars by 2016, according to global management consulting firm McKinsey.
China was ranked the world's second largest luxury car market in 2012 after the country's consumers purchased 1.25 million cars priced over 200,000 yuan (US$32,144). According to a McKinsey survey, the average annual disposable income of the 1,200 Chinese luxury car owners interviewed was 450,000 yuan (US$72,330). Those with annual incomes of 100,000-200,000 yuan (US$16,074), the minimum income range regarded as being able to afford basic luxury cars, is growing in China, the firm added.
Statistics show that the annual growth of China's luxury car market has averaged 36% over the past decade and the will be maintained at 12% before 2020. This likely means China's luxury car market will expand to 2.25 million cars by 2016 and reach 3 million cars by 2020.
BMW, Audi and Mercedes-Benz combine to dominate 80% of Chinese luxury car market. Other car brands such as Japan's Nissan are also trying to expand their operations in the luxury sector in China to grab a share of the booming market, McKinsey said.
US-based General Motors Corporation introduced its classic luxury car, the Cadillac, to China in February. Ford has also announced that it will start selling its luxury brand, the Lincoln series, in China next year. France's PSA Peugeot Citroen is trying to set up an agent for its DS luxury brand in Shanghai, while Germany's Porsche will introduce two new sport cars in China by 2014.
There are currently 100 Chinese cities with access to luxury cars, but that number is expected to grow to 300 in 2020, predicted the consulting firm.