Luxury brands eye 2nd-, 3rd-tier China cities
- Source: Gasgoo.com
- [14:26 January 20 2011]
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Luxury automakers have to cast their eye to second- and third-tier Chinese cities, when the markets of first-tier cities are becoming saturated.
Audi has shifted the focus of its China expansion from big cities onto small and medium cities. Last year, it located its first Asian city exhibition hall in Ningbo, a port city in the eastern Chinese province of Zhejjiang.
Most city exhibition halls will be built in second-tier cities, said an executive from the Audi department of FAW-VW Automobile Co., Ltd., a joint venture among China FAW Group Corporation, Volkswagen AG, Audi AG, and Volkswagen Automobile (China) Investment Co., Ltd.
In such large cities as Beijing and Shanghai, the sales volume of Audi products still tends to go up, but this will not influence its sales network expansion into second- and third-tier cities. In 2012, the number of cities covered by the network will be driven from currently 86 to 100, predicted the executive.
From January to July 2009, Audi gained a sales volume of 79,000 in the country, even more than those by both Benz and BMW, but it underwent the lowest growth of 15 percent.
In order to obtain a bigger share in the Chinese luxury vehicle market, BMW and Mercedes-Benz also has paid more attention to second- and third-tier cities when releasing new products.
The number of BMW dealers stood at 18 at the end of 2003, and jumped to 120 at the end of 2008, according to BMW China. Its distribution network has extended from first-tier cities to second- and third-tier cities, or even fast-growing counties.
Benz has also quickened the expansion of its sales network in China, one of major auto markets. Moreover, the auto giant has brought more models to the market.
Slightly earlier, Benz released nine S-class sedans in China, including S400 Hybrid, the world's first mass produced car with a lithium ion battery, with prices ranging from CNY 930,000 to CNY 2.598 million.
Klaus Maier, president of Mercedes-Benz (China) Ltd., said in the releasing ceremony that the market share of Benz S-class products rose from 41 percent of last year to 44 percent in the Chinese top luxury market, and that China became the biggest market of Benz S-class products.
In the first seven months of this year, Benz China sold 31,700 vehicles, surging 49 percent from a year earlier. In particular, its S-class sedans contributed nearly 7,300, ranking among best-selling luxury brands.
(SinoCast)
