AUTOSHOW-WRAPUP 1-China premium car sector remains bright spot

BEIJING, April 23 Mon Apr 23, 2012 5:35am EDT

BEIJING, April 23 (Reuters) - Global car makers such as GM , Daimler, BMW and Peugeot are counting on China to maintain growth in their premium offerings, even as all the signs point to an overall slowing in the world's largest auto market.

Even conservative forecasts have China's automobile market surging to 30 million vehicles a year by 2020 from last year's 18 million. Some think volume could even reach 40 million.

Executives attending the Beijing autoshow from premium brands like Mercedes, BMW and Audi were bullish about a segment they said still has plenty of room to grow.

"We expect the premium segment to grow much more strongly than the overall market," said Audi sales chief Peter Schwarzenbauer in an interview with Reuters.

"China has 304 cities with at least 1 million population and we have so far only add dealers in 187 of them. The premium market still has extremely good growth prospects. We're all still scratching the surface in China."

France's PSA Peugeot Citroen unveiled a sleek, large coupe-styled concept sedan on Monday that prefigures the Citroen DS luxury sub-brand it plans to introduce to China from June 28, with an annual volume target of 200,000 vehicles within four years.

"I don't know whether this is the best moment to be launching or not, but it's still the world's biggest auto market," Peugeot's global marketing chief, Xavier Duchemin, told Reuters. "And premium is still the fastest growing segment."

Duchemin was confident of finding enough investors for the DS sales network planned with local manufacturing partner Changan, even as rising competitive pressure on prices and dealer margins makes the task "a little more difficult".

DOUBLE DIGIT GROWTH

China's premium car market should grow 15-20 percent this year, Daimler AG's chief executive said, adding that Daimler's sales should at least match that rate.

Speaking at a roundtable event at the auto show, Dieter Zetsche also said he expected the company's Mercedes-Benz luxury brand to post a sales increase in Europe this year. He did not elaborate.

General Motors expects sales of its Cadillac models in China to match U.S. sales levels by 2015 or 2016, the company's chief executive said.

CEO Dan Akerson said Cadillac sales in China grew 73 percent to more than 30,000 last year, and were up 20 percent in the first quarter over the year-ago period. Last year, GM sold about 152,000 Cadillac cars in the United States.

He added that the company planned to add one new Cadillac model in China each year through 2016. The XTS luxury sedan will be built in Shanghai starting in the fourth quarter of this year, Akerson said.

BMW expects sales growth in China to climb by a double-digit percentage in 2012, said Ian Robertson, sales chief at BMW, adding the company expected another record sales year worldwide.

In 2011, BMW Group sold about 1.6 million cars worldwide, and in the first quarter of this year it sold about 426,000, also a record.

"I expect the (Chinese premium) market to ease somewhat from the 30 or so percent last year, but there's still a degree of upside in the market," said Robertson

"Forecasters say that premium segment in China could double over the next 4-5 years. We have about 290 BMW dealers now and will open about 50 more in the next 12 months. That also includes third-tier and fourth-tier cities."

Audi, the luxury unit of Volkswagen, saw first-quarter sales grow 10.8 percent, and said that pace of growth was extending into April in China and globally.

Sales chief Schwarzenbauer said China should surpass the United States to become the world's largest luxury car market by 2015 and he also saw opportunities in Europe despite the region's economic woes.

"There are many markets in Europe that are developing well," he said, citing Britain, Russia and Germany, that were offsetting struggling southern European markets. "I expect us to grow in Europe this year despite the headwinds."

Nissan Motor CEO Carlos Ghosn said at a roundtable with journalists that some of its rivals' recent success in China was due to price discounting, a factor he said was holding back sales of the company's premium Infiniti brand.

Ghosn said Infiniti grew 60 percent in 2011 but only 2 percent in the first three months of 2012, but added that Nissan would not join the discounting trend.

"The definition of a luxury brand is a brand for which you're ready to pay a higher price for what it represents," he said. "If you start to be a bargain, yes, you're going to have a boost in sales in the short-term but you're going to lose the luxury halo after a while."

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.