“The luxury car market has ended years of rapid growth and begun to slow down. New luxury brands such as Tesla have become the main growth driver in the luxury car market, which also means that the position of traditional luxury brands is further challenged. Compared with the past, luxury car owners have different expectations for new and established luxury brands: new brands need to work harder in configuration, smart technology and design, while traditional ones need to maintain advantages in manufacturing processes. In addition, luxury brands can meet the individualisation needs of car owners through customised car peripherals, and can also gain favour from female luxury car owners through community services with brand characteristics.”
– Austin Yuan, Research analyst
This report discusses the following key topics:
- Interest in online and offline activity content and information
- Changes in favourability of traditional and new luxury brands
- Purchase types and segment trends of car peripherals
- Comparison of online and offline purchase channels for car peripherals
- The effectiveness of traditional luxury brands using Chinese elements to improve their favourability
- Factors that increase the attractiveness of new luxury brands compared to traditional luxury brands.
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Overview
- What you need to know
- Key issues covered in this Report
- Report scope
- What you need to know
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Executive Summary
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- The market
- In 2022, the luxury car market’s volume growth turned negative, and NEVs became the main growth driver
- Figure 1: Retail sales volume and growth rate of luxury cars and total passenger cars in China, 2017-22
- Luxury cars have the opportunity to grow steadily with the help of NEVs
- Electrification is reshaping the competitive landscape of the luxury car market
- Tax cuts and subsidy policies stimulate recovery of luxury car sales volume, while Tesla’s price war intensifies industry competition
- New entrants grow against the downward trend, while BBA’s share drops
- Sales of traditional luxury brands’ NEVs increased slightly but will continue to be under pressure in the short term
- BBA still dominates the sedan and SUV market
- Companies and brands
- Combine science and art to tell a good brand story
- Leverage social platforms to build a high-quality car owner community
- Improve comfort: use intelligent infrared technology to heat the cabin
- Provide better appearance for technology features: Use hidden headlights to replace traditional grille
- The consumer
- Traditional German luxury car brands’ advantage in the first car purchase market has weakened
- Figure 2: Consumer profiles of luxury car owners, by brand origin and car purchase condition, 2023
- Nearly six in 10 luxury car owners are willing to pay a premium for a customised product or service
- Figure 3: Attitudes towards car purchase and car-related lifestyles, 2023
- Audi has the greatest advantage in favourability, while Hongqi’s favourability enhanced to the first tier
- Figure 4: Change in brand favourability, 2023
- Opportunities exist for car peripherals in all segments
- Figure 5: Car peripherals, 2023
- Purchase channels for car peripherals are becoming more diverse, while comprehensive shopping platforms grow penetrating
- Figure 6: Platforms where you buy car peripherals, 2023
- Traditional luxury brands can introduce models exclusive to Chinese market to enhance their favourability
- Figure 7: Activities to improve favourability, 2023
- New luxury brands need to work harder on configuration, smart technology and design
- Figure 8: Competitiveness improvement factors, 2023
- What we think
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Issues and Insights
- A consensus among luxury brands: luxury concept cannot be separated from Chinese exclusive elements
- Figure 9: Volvo Car Design Studio in Shanghai, 2023
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- Figure 10: The new Hongqi L5, 2023
- Opportunities exist for customised car peripherals
- Figure 11: Luxury brands’ customised peripherals, 2022
- Focus on community services to win favour from female car owners
- Figure12: Leading Ideal’s exhibition area at the Shanghai International Auto Show, 2023
- A consensus among luxury brands: luxury concept cannot be separated from Chinese exclusive elements
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Market Size and Forecast
- In 2022, the growth rate of the luxury car market turned negative, and NEVs became the main growth driver
- Figure 13: Retail sales volume and growth rate of luxury cars and total passenger cars in China, 2017-22
- Luxury cars have the opportunity to grow steadily with the help of NEVs
- Figure 14: Forecast of luxury cars sales volume, China, 2017-27
- In 2022, the growth rate of the luxury car market turned negative, and NEVs became the main growth driver
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Market Factors
- Electrification reshaping the competitive landscape of the luxury car market
- Tax cuts and subsidy policies stimulate recovery of luxury car sales volume, while Tesla’s price war intensifies industry competition
- Figure 15: Weighted average transaction price for selected luxury cars, 2022
- Chip shortage in the supply chain affected luxury cars’ sales volume
- Electrification reshaping the competitive landscape of the luxury car market
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Market Segmentation
- New entrants grow against the downward trend, while BBA’s share drops
- Figure16: Market share of luxury car brands (wholesale sales volume in a narrow sense), 2022
- Traditional luxury brands’ NEVs slightly increased and will continue to bear pressure in the short term
- Figure 17: Market share of NEVs from luxury brands, 2022
- BBA still dominates the high-end sedan and SUV market
- Figure 18: Market share of luxury brand SUVs and sedans, 2022
- New entrants grow against the downward trend, while BBA’s share drops
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Marketing Cases
- Combine science and art to tell a good brand story
- Figure 19: Mercedes-Benz VISION EQXX Technology and Art Exhibition, 2022
- Leverage social platforms to build a high-quality car owner community
- Figure 20: Mercedes-Benz Car Owner Club community on Xiaohongshu, 2023
- Target the emotional pain points of society precisely to get closer to users’ minds
- Figure 21: Audi’s short video themed ‘Support the Perseverance’, 2023
- Combine science and art to tell a good brand story
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New Product Trends
- Improve comfort: use intelligent infrared technology to heat the cabin
- Figure 22: Lexus infrared heating system
- Provide better appearance for technology features: Use hidden headlights to replace traditional grille
- Figure 23: BMW new front decorative panel patent
- Using AI technology for appearance design
- Figure 24: Audi designers drew inspiration from FelGAN
- Create a high-quality car environment with air purification technology
- Figure 25: Volvo new air purification system
- Improve comfort: use intelligent infrared technology to heat the cabin
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Luxury Car Owners’ Profiles
- Traditional German luxury car brands’ advantage in the first car purchase market has weakened
- Figure 26: Consumer profiles of luxury car owners, by brand origin and car purchase condition, 2023
- Older luxury car owners prefer new energy luxury cars
- Figure 27: Consumer profiles of luxury car owners, by energy type, age and car purchase condition, 2023
- Tier 1 city luxury car owners are the main consumption driver of new car brands
- Figure 28: Consumer profiles of luxury car owners, by brand and city tier, 2023
- Traditional German luxury car brands’ advantage in the first car purchase market has weakened
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Attitudes towards Car Purchase and Car-related Lifestyles
- Nearly six in 10 luxury car owners are willing to pay a premium for a customised product or service
- Figure 29: Attitudes towards car purchase and car-related lifestyles, 2023
- Young luxury car owners prefer car reviewers to share information about entertainment or lifestyle
- Figure 30: Attitudes towards car purchase and car-related lifestyles, by age, 2023
- Lower tier city luxury car owners are more interested in online and offline activities
- Figure 31: Attitudes towards car purchase and car-related lifestyles, by city tier, 2023
- Surveyed Tesla owners are more willing to pay a premium for customised products or services
- Figure 32: Attitudes towards car purchase and car-related lifestyles, by brand origin, 2023
- Nearly six in 10 luxury car owners are willing to pay a premium for a customised product or service
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Change in Brand Favourability
- Audi has the greatest advantage in favourability, while Hongqi’s favourability advances to the first tier
- Figure 33: Change in brand favourability, 2023
- Female luxury car owners are more favourable towards high-end new energy brands
- Figure 34: Change in brand favourability, by gender, 2023
- Low tier city luxury car owners’ favourability for luxury brands increased more significantly
- Figure 35: Change in brand favourability, by city tier, 2023
- Audi has the greatest advantage in favourability, while Hongqi’s favourability advances to the first tier
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Purchase of Car Peripherals
- Opportunities exist for car peripherals in all segments
- Figure 36: Car peripherals, 2023
- Young luxury car owners are more willing to buy car safety supplies
- Figure 37: Car peripherals, by age, 2023
- Beauty cleaning products are in greater demand in tier 2 or lower cities
- Figure 38: Car peripherals, by city tier, 2023
- Opportunities exist for car peripherals in all segments
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Purchase Channels for Car Peripherals
- The purchase channels for car peripherals are becoming more diverse, while comprehensive shopping platforms grow penetration
- Figure 39: Platforms where you buy car peripherals, 2023
- New energy luxury car owners visited non-automotive stores more frequently
- Figure 40: Platforms where you buy car peripherals, by energy type, 2023
- Lower tier city luxury car owners are less active on social ecommerce platforms than their counterparts in tier 1 and 2 cities
- Figure 41: Platforms where you buy car peripherals, by city tier, 2023
- The purchase channels for car peripherals are becoming more diverse, while comprehensive shopping platforms grow penetration
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Effective Ways to Improve Favourability for Traditional Luxury Brands
- Traditional luxury brands can introduce models exclusive to Chinese market to enhance their favourability
- Figure 42: Activities to improve favourability, 2023
- Keeping model design style consistent with the global market can help brands earn favourability from young luxury car owners
- Figure 43: Activities to enhance consumers’ favourability, by age, 2023
- New energy luxury car owners expect traditional luxury brands to launch new products worldwide
- Figure 44: Activities to enhance consumers’ favourability, by energy type, 2023
- Traditional luxury brands can introduce models exclusive to Chinese market to enhance their favourability
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New Luxury Brands’ Attractiveness Compared to Traditional Brands
- New luxury brands need to work harder on configuration, smart technology and design
- Figure 45: Competitiveness improvement factors, 2023
- Tier 1 city luxury car owners are more demanding on new luxury brands’ configuration
- Figure 46: Competitiveness improvement factors, by city tier, 2023
- New and established brands’ improvement in intelligent technology is more appealing to additional/replacement car buyers
- Figure 47: Competitiveness improvement factors, by car purchase condition, 2023
- New luxury brands need to work harder on configuration, smart technology and design
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Appendix – Methodology and Abbreviations
- Methodology
- Methodology
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