Industry Analysis Case Study

Competition in China’s Luxury Car Market

OR

Abstract:
With the arrival of new generation Chinese, who are more enterprising and ambitious, the pattern of expenditure on luxury goods has changed. By early 2004, the country emerged as the world's fastest-growing and third-largest car market after the US and Japan. Even the government policy of fixed permit fee on all imported cars has encouraged the growth of luxury car market in China. By 2004, major carmakers like Volkswagen, Toyota, Ford, GM, and Mercedes-Benz were operating in China. Even Italy's Ferrari and Maserati expanded their operations. What once was an unexplored market soon became competition-frenzy and model-conscious. Added to this, in 2004, the Chinese government increased the import quota of cars and decreased the permit fee on imported cars. This came as a shot-in-the-arm to many more carmakers who were planning to foray into China.

Pedagogical Objectives:

• To trace the various factors that contributed to the increase in competition in the China's luxury car market
• To discuss how the luxury carmakers are vying to attract the new generation Chinese

Keywords : China's luxury car market; Competition in China's luxury car market; China's booming car market; Competitive Strategies Case Study; Luxury cars in China; China's economic landscape; China's rich class; GM (General Motors); BMW; Toyota; Ford, GM and DaimlerChrysler; Nissan; Ferrari; Rolls Royce; Maybach; Bentley Motors