China Lifestyles of Luxury Car Owners Consumer Report 2024

3.74m luxury cars were sold in the Chinese market in 2023, up 7.9% year-on-year, with high-end NEVs from Tesla and Li Auto contributing the majority of the growth. In contrast, first-tier traditional luxury brands saw sluggish growth, achieving only marginal gains, while non-first-tier traditional luxury brands saw an overall decline in sales. In the first half of 2024, high-end domestic NEVs continued to perform strongly, while Tesla experienced a decline in sales due to weaker product advantages.

In terms of market share, high-end domestic new energy brands are increasingly recognised by luxury car owners for their smart technologies and other ‘soft’ strengths, challenging the first-tier luxury car grouping of Mercedes-Benz, BMW and Audi (BBA). However, in the transition to electrification, traditional luxury brands still have cards to play. Over 30% of surveyed luxury car owners indicate that they would consider traditional fuel car brands when considering a plug-in hybrid for their next car (Mercedes-Benz 32%, BMW 33%, Audi 30%), a higher proportion than would consider emerging domestic players (NIO/XPENG/Li Auto 15%).

It is worth noting that the willingness of luxury car owners to pay for smart features is steadily increasing. 45% of the luxury car owners surveyed believe that NEVs over RMB300,000 need to have comprehensive smart connectivity features to be worth buying, surpassing strong power and acceleration (42%). Custom smart configurations better meet the needs of luxury car owners, with 76% of respondents willing to pay up to RMB50,000 extra for customised software features.

65% and 37% of surveyed luxury car owners, respectively, value a premium consumer experience and exclusivity when making car purchase decisions, factors that are more important only when selecting vacation hotels (70% and 48%). The service experience offered by cars is as important as that offered by hotels. Brands can provide luxury car owners with unique experiences through high-quality innovative services, reducing the distance with the brand and establishing trust.

This report looks at the following areas:

The price war is turbocharging competition in the luxury car market, with high-end new energy brands replacing traditional luxury brands as the main drivers of growth. The definition of luxury is changing, with 'soft' strengths such as smart technology gradually rising in importance.

Austin Yuan, Senior Analyst, China Insights

Market Definitions

This Report covers 1,000 car owners aged 18-59 who have purchased a luxury car priced over RMB300,000 in the last six years.

The Report explores the lifestyles and spending motivations of luxury car owners, including the factors influencing purchase decisions, the desired advantages of high-priced NEVs, preferred brands for different energy types, interest in products and services, willingness to pay a premium for different customised services and products and services prioritised for spending.

For the purposes of this survey, luxury car brands are defined as the following 17 brands: BMW, Audi, Mercedes-Benz, Tesla, Hongqi (红旗), Cadillac, Volvo, XPENG (小鹏), NIO (蔚来), Li Auto (理想), Lincoln, Land Rover, Jaguar, Infiniti, Acura, Lexus and Porsche.