BEIJING — At age 32, Jason Jia already is the kind of customer luxury automakers are seeking as competition grows in China’s lucrative but crowded market.
The energy industry consultant has traded up from a Volkswagen Polo to a VW GTI. Now, as he stood looking at a Cadillac CTS at the Beijing auto show, he said he wants a Mercedes Benz or a BMW.
“The engine needs to be turbo,” said Jia, who has a budget of 500,000 yuan ($80,000). “Is that a lot of money? Cars over 300,000 yuan ($48,000) are everywhere.”
A few years ago, Jia’s options might have been limited to cars designed for an older American or European. But now, luxury brands from Mercedes and Infiniti Audi to Lincoln are racing to create smaller, sportier models for younger Chinese buyers.
They are trying to appeal to local tastes in everything from paint colors to the scent of dealerships and new vehicles.
“The megatrend for us in China will be compact cars,” said Martin Keuhl, head of corporate communications for Audi China. “It’s not so status-driven in the sense that ‘big is beautiful.’ Now you can have a good car that is small. Younger people also are more open to this.”
Luxury automakers, like their mass-market counterparts, are looking to China to drive future growth and are investing heavily to gain or expand a foothold in its market. This year, while overall market growth is expected to cool to 8 to 10 percent from last year’s 15.7 percent, analyst Zhu Bin of LMC Automotive said luxury sales growth might accelerate from 21 percent to 24 percent.
New brands including Ford Motor Co.’s Lincoln are entering the market, adding to intense competition. Manufacturers are shifting production to China, allowing them to cut costs and compete on price as well as style.