China Luxury Cars Sales to Beat U.S. by 2020
A new report from McKinsey & Company (link opens in PDF) estimates that sales of premium cars in China will surpass U.S. sales by 2020.
Concurrent with China's economic boom, luxury-car sales have increased at an annualized rate of 36% in the past decade, while passenger-vehicle sales have improved an average 26% per year. In 2012, the Chinese bought 1.25 million premium vehicles, second only to the Americans' 1.7 million purchases.
The consulting firm expects that annual sales will reach 3.0 million in China by 2020, compared with just 2.3 million in the United States. This estimate is a result of a reduced 12% annualized increase for the next eight years but still represents the fastest sales growth of any country.
In a 1,200-person consumer survey, McKinsey found that "reflection of social status" and "self-indulgence" served as primary reasons for premium upgrades.
In what may prove a troubling sign for international luxury-car manufacturers such as Tata Motors , maker of Jaguar and Land Rover, 66% percent of respondents believe that a Chinese automaker will produce internationally recognized luxury cars within 10 years. When asked if they would choose a Chinese premium car, 41% responded affirmatively.
The article China Luxury Cars Sales to Beat U.S. by 2020 originally appeared on Fool.com.
Fool contributor Justin Loiseau has no position in any stocks mentioned and doesn't predict any "self-indulgence" in Chinese luxury cars any time soon. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo.The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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