Size matters in China

Having had the pure privilege of driving a £55,000 Audi 3.0 TDI A8 this Christmas holiday in the UK, an article in Singapore’s MyPaper (www.mypaper.sg) caught my eye. Audi has long held the number one spot in the luxury car market in China, with a market share of approximately 40% (ahead of BMW and Mercedes Benz with around 25% each). The article provides some insight into the reasons behind Audi’s success.

Audi seems to have got its market research right. It realized long before its rivals that the customers in the Chinese luxury car market like long-wheel based (larger and longer) vehicles. For the Chinese, such cars reflect comfort, taste and wealth! Some key issues reported in the article include:

• China is now the largest buyer of automobiles; a record that only the USA previously held since records began.
• Large cars bring psychological benefits to the Chinese customer (Audi’s A6 is longer in China; something it catered specifically for the market).
• Cars owned by business people in China are mainly chauffeur-driven and hence space/comfort (especially in the rear seats) is of top priority.
• China now represents the largest and most important market for luxury cars, which saw a 20% increase in sales despite the world financial crisis.
• Audi’s research found that more than 70% of luxury car users hope to combine sportiness and comfort with ample rear space and leg room.

Market leader in China - the Audi A6

No wonder Audi’s rivals have launched or plan to launch new models to compete with Audi’s top selling A6 (BMW bringing in the 5-series, Mercedes Benz with its E Class and Volvo with the S80). For the Chinese, bigger is better as it reflects prestige. So, it seems that size does matter in what is now the world’s largest market for motor vehicles.