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Customer LoginsPorsche adds more dealers in China, Lincoln launches Continental, Cadillac hits 100,000-unit sales milestone
Premium brands Porsche, Lincoln and Cadillac are all fighting for market share in China.
IHS Markit Perspective
- Significance: In 2011, Cadillac's sales grew 75.7%, while Porsche's sales rose 78%, with both brands selling fewer than 30,000 units in China. However, in 2013, Cadillac's sales grew 67.67% and Porsche's sales jumped 19.85%.
- Implications: With local production at its core, the Cadillac brand is forecast to see higher volume sales in China than Porsche and Lincoln.
- Outlook: By 2020, Porsche is forecast to hit annual sales of more than 76,000 units in China and Lincoln to reach 25,000 units. Both continue to sell only imported models in China, compared with Porsche's locally built models, which the premium brand considers to be its unique selling point.
International premium car brands Porsche, Lincoln, and Cadillac are all fighting for market share in China with fast-expanding dealership networks, launches of models to entice more consumers, and using differing marketing techniques to lure more car buyers to their brands.
Porsche, the premium car brand under the Volkswagen Group, has yesterday (28 November) opened its third dealership in Hangzhou, in China's Zhejiang province, and the 12th in the province. The Porsche Center Hangzhou Gongzhu dealership covers 10,359 square metres and has a display area for 14 cars. This Hangzhou dealership marks the 11th Porsche dealership in China under Porsche Automotive Investment GmbH (PAIG), which is 100% owned by Porsche Holding Salzburg.
In 2015, Porsche achieved phenomenal growth in China, becoming the largest single market for the brand worldwide. "Porsche is continuing this positive momentum in 2016, with deliveries of over 55,000 units in the first 10 months," said Franz Jung, president and chief executive officer of Porsche China. Porsche now has 94 dealerships across mainland China, Hong Kong, and Macau. In 2015, Porsche delivered 58,009 vehicles in mainland China, Hong Kong, and Macau.
At the Guangzhou Motor Show earlier this month (19−27 November), Porsche unveiled the all-new Porsche Panamera. Speaking at the launch, Jung said, "With the structural adjustment of China's luxury car segment and maturing customer demand, we will continue to release more competitive products to enhance Porsche's brand value. The debut of the new Panamera in the Auto Guangzhou has proved our strong commitment to the Chinese market." The Panamera was originally brought to China seven years ago and now the country is the largest single market for the model, accounting for 30% of its global sales. Two new Panamera models, the Panamera 4S and the Panamera Turbo, were displayed at the motor show. The new Panamera 4S is equipped with a new 2.9-litre V6 bi-turbo engine producing 440 hp and 550 Nm. The car sprints from 0 to 100 km/h in only 4.4 seconds and has a top speed of 289 km/h. The new Panamera Turbo is equipped with a new 4.0-litre V8 bi-turbo engine producing 550 hp and 770 Nm. The car sprints from 0 to 100 km/h in only 3.8 seconds and has a top speed of 306 km/h. In addition, the engines are paired with the new 8-speed Porsche Doppelkupplung (PDK II) transmission.
Lincoln, the premium brand of Ford, opened the Changchun Aojitong Lincoln Store on 24 November, its second store in Jilin province. The brand is on track to have a total of 65 dealerships opened in China by the end of the year, raising this to 80 by the end of 2017. In the first three quarters of the year, Lincoln sold a total of 20,996 units in China, a 191% year-on-year (y/y) increase.
On 28 November, Lincoln officially launched the all-new Lincoln Continental in China, marking the fifth car now on sale under the brand in the country. The car has been crafted with Chinese consumers in mind. In a company press release, Lincoln states of the model, "Lincoln designers incorporated Chinese design philosophies of harmony and tranquillity throughout the interior and exterior." The flagship car is fitted with a 3.0-litre twin-turbocharged V6 engine. "As we talked to potential customers in China and around the world, we listened closely to a group of new luxury buyers looking for something more than a mere machine. They want a vehicle that makes their lives more enjoyable, and offers personally crafted, holistic luxury experiences," said Kumar Galhotra, president of Lincoln, at the launch. The prices of all five editions of the Continental were announced, which start at CNY418,800 (USD60,700) and the Lincoln Presidential Series costs CNY613,800.
Cadillac, the premium brand of General Motors (GM), has sold over 100,000 units already this year in China, as of 25 November, which marks a 54% y/y increase for the brand. "Reaching this milestone reminds us that Cadillac is setting a new standard for aspirational and premium appeal in China," said Andreas Schaaf, vice-president of Cadillac China. "Our new products, our dealers and Cadillac's global transformation are catalysts for the unprecedented growth we are experiencing."
This year, the brand has introduced two new models - the CT6 prestige sedan and XT5 luxury crossover - which are being manufactured at Cadillac's new state-of-the-art facility in Shanghai. They complement Cadillac's other models in the Chinese market, which include the XTS luxury sedan and ATS-L sport sedan. The brand now has a presence in all key luxury segments, including mid-sized and large luxury sedans, medium-range luxury sedans, and mid-sized luxury sport utility vehicles (SUVs). Cadillac is also exploring alternative propulsion with the upcoming introduction of the Cadillac CT6 plug-in hybrid electric vehicle (PHEV).
Cadillac plans to introduce 10 new and refreshed models in China over the next few years, as it aims to boost market share in its second-largest global market. In the next two years, Cadillac aims to grow its dealership network to more than 250 outlets in China.
Outlook and implications
The sales volumes of Porsche and Lincoln in China have risen considerably, but Cadillac has already this year surpassed them with sales of 100,000 units, up from 79,779 units sold in the country a year before. The difference is that Cadillac produces its models in China whereas the other two brands import theirs. Porsche maintains that by keeping production in Germany the brand has a unique selling point, while Lincoln is rumoured to be considering a local base in China, although for the time being all models are imported, and current forecasts do not reflect any local Lincoln production in China.
The chart shows that in 2010 both Cadillac and Porsche were selling approximately similar volumes in China. In 2010, Cadillac sold 15,568 units in the country and Porsche sold 12,759 units, IHS Automotive light-vehicle sales data show. Lincoln was only recently officially launched in China − in 2014 − and prior to this all sales were via the 'grey import' market.
The big increase in sales for Cadillac came in 2013, when they jumped 67.67% y/y to over 50,000 units. At the same time, Cadillac raised output in China by 226.8% y/y to over 20,000 units. The expansion has not stopped there − in January this year GM opened a USD1.2-billion plant dedicated to Cadillac production in China. This will result in added capacity for the brand with localised production of models such as the Cadillac CT6 and the XT5 SUV, launched earlier this year at the Beijing Motor Show.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.