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Money is no object for the young hungering for automobile luxury
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CHINA’S luxury car market is galloping forward with no sign of a slowdown in the Year of the Horse. In fact, 2014 may be another year of double-digit growth, putting China on track to overtake the US as the biggest market in the premium segment in just three years.
Advisory firm PwC said it forecasts 11.5 percent compounded annual growth in China luxury car sales between 2013 and 2020. That would push sales volume beyond 3 million units, compared with 1.4 million units last year and bring China’s luxury penetration rate up to 10 percent — on par with mature markets.
This rapid growth, which is almost double the pace of China’s mass-market car sales, is undoubtedly driven by the expanding younger generation.
“Foreign luxury brands seem to appeal to young buyers, who perceive them as safer, more technologically advanced and of better quality,” said Wilson Liu, China automotive leader of PwC. “On the other hand, the trend of overall vehicle downsizing amid more stringent emission standards is also reflected in the luxury segment. Entry-level models meeting these standards are increasingly available, and they appeal to younger, first-time buyers.”
In other words, a generation hungry for consumer goods wants the choice of car to reflect status. After all, “face” is still a key factor in deciding to buy luxury goods.
At the same time, buying a luxury car is increasingly becoming a personal statement, market research firm TNS pointed out in its latest report.
Luxury car buyers include connoisseurs fascinated by technical detail, relaxed customers who want comfort, and fashionistas keen to follow the latest trend. The emergence of these buyers will likely increase the importance of design, features, equipment and services.
Today, luxury in China is not just about recognizing prestigious brands, but also about appraising objects as worthy, said Michael Griffiths, a global expert in cultural insight and strategy at TNS China.
That means perfect stitching and bodyworks lines can be as important as big engines and stretched chassis to the Chinese, whose penchant for luxury overstatement might be watered down in time by the trend toward intricate design and artistic simplicity.
The buzzword tuhao, which spread like wildfire online last year, exemplifies in a nutshell the evolution of the concept of luxury. It initially referred to those who bought the gold version of the Apple smartphone 5S. The phrase is comprised of two characters: one means “soil” or “earth,” and the other means “grandeur.” The word later became “a parody of the fusion of rustic roots with crass ambition and gaudy expression,” said Griffiths.
“Tuhao represents a tongue-in-cheek satire of China’s breakneck pursuit of affluence in the get-rich-quick era,” he said. “It shows a new capacity by the Chinese to laugh at themselves.”
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