According to the latest data released by the China Passenger Car Association (CPCA), sales of imported ultra-luxury brands reached 471 units in September this year, down 47% year-on-year. In the first nine months of this year, cumulative sales of ultra-luxury vehicles amounted to 4,762 units, a year-on-year decrease of 60%.

In terms of vehicle imports, the overall trend is also declining. In September, automobile imports amounted to 55,000 units, down 20% year-on-year and 27% month-on-month. Cui Dongshu, Secretary-General of the CPCA, wrote in an article that this was a "rare significant decline in September." From January to September, cumulative domestic automobile imports amounted to 530,000 units, down 4% year-on-year, marking negative growth for the third consecutive year.

The decline in sales has directly affected the end prices of products. Following Porsche's price dropping below 400,000 yuan, Maserati, another ultra-luxury car brand, recently lowered its prices to around 500,000 yuan. Bentley and Rolls-Royce also made headlines due to price reductions. Although significant price reductions by ultra-luxury brands are relatively rare compared to the past, current market feedback suggests that even discounted ultra-luxury vehicles seem to struggle to attract consumers in the short term.

▍Sales Decline Against the Macro Background

Over the past decade, the Chinese market has successively become an important global market for multiple ultra-luxury brands. In 2015, China became Porsche's largest single market globally, maintaining this position for seven consecutive years. In 2016, it was Maserati's second-largest global market, with its flagship model, the Quattroporte, being the top-selling model in the world's largest market.

However, by September 2024, statistics showed that among the segmented brands, Bentley had the highest sales, declining 7% year-on-year to 229 units. Ferrari and Lamborghini, which were previously popular in China, also saw rapid declines in sales, with monthly sales of 77 and 49 units, respectively, down 21% and 20%. Additionally, Maserati, Aston Martin, and McLaren had imported sales of 38, 26, and 7 units, respectively, with only Bentley exceeding 100 monthly sales.

Since last year, sales of ultra-luxury brands such as Bentley, Lamborghini, and Ferrari have declined in China, with year-on-year declines of 17.76%, 16.99%, and 4.07% in 2023, respectively. Notably, Bentley experienced sales declines in both the global and Chinese markets.

Aston Martin is also facing severe challenges. Due to a significant sales decline, Aston Martin recently revised its performance expectations for this year, predicting a reduction of about 1,000 vehicles in annual sales. Under sales pressure, ultra-luxury cars in the Chinese market have begun to reduce prices. However, the current situation indicates that price reductions have not significantly impacted sales.

Industry insiders believe that the sluggishness in the ultra-luxury car market is related to global economic instability and weakened consumer purchasing power. From a macro perspective, the global economy is deeply interconnected, and the global economic downturn in recent years has affected economic development in various countries. The most direct manifestation of this is the cooling of high-end goods and luxury markets, making the decline in ultra-luxury car sales expected.

▍Opportunity for Domestic "Affordable Alternatives"?

Furthermore, the "premiumization" of domestic new energy vehicle models has weakened the competitiveness of luxury and ultra-luxury products. Domestic new energy vehicles have considerable advantages in performance, technological sense, comfort, and design.

Domestic "luxury" cars such as WENDEY M9, LIXIANG L9, XIANGJIE S9, and YANGWANG U8 are targeting the luxury and ultra-luxury brand markets, gradually eroding the market share of brands like BMW, Mercedes-Benz, Audi (BBA), Porsche, and second-tier ultra-luxury brands like Maserati. According to CPCA data, the share of new energy vehicle sales priced above 400,000 yuan in China has increased from 1.2% in 2017 to 3.4% in 2023. In the 200,000-300,000 yuan range, this figure jumped from 8.5% to 17.5%.

Previously, when Chinese brands were positioned lower, consumers had to choose traditional luxury brands or imported models if they sought experiences in power, configuration, and performance. Nowadays, in terms of product experience, in addition to bridging the gap with imported luxury cars, domestic brands have also developed their unique advantages.

Particularly, the rise of intelligence in electric vehicles poses a direct threat to traditional luxury car brands. Traditional luxury brands, represented by Porsche, lead in performance and craftsmanship but lag behind in intelligence and electrification. Features like assisted driving, intelligent control, and ultimate comfort, which are unique to new energy vehicles, are becoming important considerations for consumers when purchasing cars. The inability to meet these new demands has become a "hard injury" for traditional luxury brands.

Cui Dongshu, Secretary-General of the CPCA, stated that the growth of new energy passenger cars has led to a clear trend towards premiumization. The sales structure of passenger cars in China has continued to rise in price segments, with a significant increase in the sales share of high-end models and a decrease in the sales share of low- to mid-priced models. This is driven by consumption upgrades and the upgrading of replacement groups.

From the current domestic market perspective, the imported car market still relies on the demand for luxury cars for support, while the trend for ultra-luxury brands is weakening. Especially as Chinese new energy vehicle brands begin to enter the luxury market, domestic cars offer more choices and increasingly powerful performance. Against this backdrop, the market share of imported cars with higher premiums is gradually being eroded, reflecting the recognition of domestic new energy vehicles in the luxury brand market.

Nonetheless, some ultra-luxury brands remain optimistic about the prospects of the Chinese market. Stefano Domenicali, Chairman and CEO of Automobili Lamborghini, believes that as the world's largest automotive market, China maintains a trend of continuous growth. In terms of the supercar market, China still has significant room for development compared to other markets, indicating great potential.

In September this year, Maserati China appointed a new General Manager, Hanbang Yu, who previously held key management positions at Genesis China, MG Europe, and SAIC Volkswagen, demonstrating a "deep understanding of the Chinese market."

The true customers of ultra-luxury brands are ultra-high-net-worth individuals. This group cares less about price and more about the unique image and user value that the brand can create for consumers at the psychological level. As the core competitiveness of ultra-luxury brands, such as brand history and market positioning, gradually diminishes, they need to reshape their value in the hearts of Chinese consumers with a new "ultra-luxury" narrative amid the new energy wave.

Typesetting | Zheng Li

Image Sources | Aston Martin, BYD, Shutterstock