China Luxury Car Market to Grow Annually to 3m

China’s premium car market will grow by half over the next decade, Audi CEO Rupert Stadler said, citing growing personal wealth and the emergence of flourishing private enterprises as key drivers.

Stadler said the market would grow to about three million cars per year in a decade’s time, driven by broader growth in the world’s second-largest economy, rising wealth and the “entrepreneurial development” of private firms, Reuters reported.

“We will expect significant growth,” Stadler said at the Shanghai Motor Show on Wednesday. “It doesn’t matter if it comes in two years or three years. But at least from a 10-year perspective we see growth.”

Audi, the luxury division of Volkswagen Group, was an early entrant to China and remains the best-selling premium car brand in the market, although it is rapidly losing ground to newer models from rival Mercedes-Benz, which took the global sales crown from BMW brand last year.

Hubertus Troska, head of China operations for Mercedes-Benz, said separately at the Shanghai show he expects China’s premium market will reach the 3 million mark within five years.

German brands currently account for about 70% of luxury vehicle sales in China, but that share could decline as more brands enter the luxury car and SUV segments.

Audi said in January it would sell more electric cars in China and deepen ties with local partner China FAW Group Corp to counter the rival Mercedes and BMW brands.