The Chinese car import market grew from about 42,000 imported cars in the year 2000 to over one million imported cars per year (CAAM 2012). With the story about Mr. Ferrari and the first Ferrari imported to China, presented in the past few days, we need to take a close look at the state of the imported car market.
Even with the import markets close relation with industry policy, and after entering the WTO in 2001, imported car sales did not affect domestic sales, vice versa the growing amount of high-standard cars produced locally by Western companies did not affect imports. Both locally produced and imported cars showed steady growth through the period.
Imported cars are mostly sports utility vehicles (SUVs), covering about 58 Percent of the total imports in 2011 and still increasing. The customer demand for those cars is also driven by infrastructure and geology of the country. Opposed to this, the Chinese consumption tax, for cars with over 2.5 liters capacity, drives the engine mix of imported cars downwards. This might shift the car imports even more to European automobile companies, and away from larger displacement American models.Most imported cars stem from Germany with its luxury car brands. Second to Germany, the Japanese car makers profit from their proximity and thus import not only luxury cars, just as South Korea. Furthermore the United States and Great Britain add up to the top-five import countries in terms of automobiles.
As in the case of the Italian luxury vehicle of Mr. Ferrari, a big reason to import a car obviously is the status connected with the import itself. Consumer demand for luxury cars that are nto available in China adds up to this (Kasperk et al. 2011). About two thirds of the imported cars originate from luxury brands such as Mercedes-Benz. Even the small luxury car producer Porsche, in China sometimes perceived as SUV brand, brings over 22,000 cars into the country every year. With increasing competition in the Chinese car market, the currently given price difference between China and globally develops also in the luxury segment in favor of the consumers. Among the top importers this competition especially shows up between BMW selling 7 Percent more imported cars than Mercedes-Benz in 2011. Runners-up are Lexus and Audi, followed by Volkswagen.
Those cars in 2011 to about 30 Percent went to the well developed first tier cities with a population of at least 5 million such as Beijing, Shanghai, or Guangzhou. Close to 40 Percent however already today find their buyers in second tier cities with the provincial capitals as Changchun, Nanjing, or Wuxi (Sinomach 2012). Third tier cities as Chengdu or Foshan cover with 17 Percent slightly more imported cars compared to the smaller fourth tier cities at 13 Percent due to their geological location and development of a higher class of consumer.