SUV Market Soaring in China
The world's most populous nation and home to the "One Child Policy," is apparently growing a taste for large, bulky SUVs. According to a Reuters report out this week, China's economy isn't the only thing booming. Last year 2.1 million SUVs were sold in China, roughly half the number sold here in the U.S. But more indicative is the sharp growth the sector has experienced, with Chinese consumers electing a sport utility vehicle 25.3 percent more than the previous year. Like urban consumers in cities across America, the Chinese have little need for the off-road capabilities an SUV can provide, and the purchases more often reflect status and success. "SUV is certainly the growth segment in China and the manufacturers are on to this," said William Russo, an industry analyst who runs the consultancy firm, Synergystics. "The Chinese market has now reached a more mature level. The buyers who are coming in are not first-time buyers. When you buy your second car, you tend to look for more variety. It's bought for the family. It's bought to do recreational things." Currently, the Japanese and Koreans have the largest share of the market, with European brands such as Audi and Mercedes-Benz dominating the luxury segments. The Honda CR-V, a relatively small SUV, was the best selling model last year, with strong offerings from Nissan, Hyundai, Toyota and Kia as well. The Audi Q5 was the top selling luxury SUV. While Asian and European brands have a strong presence, American brands such as General Motors and Ford have made inroads in other segments such as sedans and minivans, and plans to grow in the SUV market are well under way. Klaus Maier, head of Chinese operations for Mercedes-Benz believes the market is just in its infancy. "I would assume that this trend will continue. I can't see an end for the next 10 years, especially for the luxury segment." Indeed with a robust Chinese economy slated for more growth in the coming years, he may be right. Source: Reuters
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