Luxury brand sales in 2023: BBA will exceed 700,000 units, and Lincoln will decline by double digits

Economic Observer reporter Wang Shuaiguo Entering January 2024, luxury car companies have successively released sales data for 2023. According to the Economic Observer reporter, Mercedes-Benz, BMW, and Audi (commonly known as "BBA" in the industry) will all achieve year-on-year sales in China in 2023, but the growth rate is lower than the average level of high-end brands.

According to data released by the China Association of Automobile Manufacturers (hereinafter referred to as the "China Association of Automobile Manufacturers") on January 11, the sales volume of domestically produced high-end brand passenger cars will reach 4.516 million units in 2023, a year-on-year increase of 15.4%, 11.2 percentage points higher than the overall sales growth rate of domestic passenger cars, continuing the double-digit growth trend for many years.

If the growth rate of 15.4% is taken as a reference, among the above nine luxury brands, only Hongqi and Jaguar Land Rover outperformed the market. In this regard, Xu Haidong, chief engineer of the China Automobile Association, proposed that this is mainly because the domestic high-end new energy brands have taken a lot of share from the market.

"Due to the rapid development of new energy vehicles in the domestic market, many new power brands and traditional car brands are constantly launching high-end and luxury cars, which provides Chinese consumers with more choices. Originally, you could only choose BBA to buy high-end cars, but now we see BYD, GAC, NIO, Ideal, Huawei, and so on. Xu Haidong said that the emergence of these new energy luxury cars has increased consumers' choices, stimulated the consumption of high-end cars from the supply side, but also diverted some of the customer groups of traditional luxury brands.

BBA: BMW has the highest sales volume and Audi has the largest growth rate

In 2023, BMW (including MINI, Rolls-Royce), Mercedes-Benz and Audi will sell 825,000 units, 765,000 units and 729,000 units in China, up 4.2%, 1.8% and 13.5% year-on-year, respectively.

Among the three brands, BMW not only has a higher overall sales figure, but also has a higher penetration rate of new energy sources. In 2023, BMW will sell about 100,000 pure electric vehicles in China, accounting for 12.1% of total sales, while customers will deliver 31,000 Audi pure electric e-tron series models in the same period, accounting for only 4.3%.

In 2024, BMW plans to launch a number of replacement or facelift models in the Chinese market, including the all-new BMW 5 Series, BMW 4 Series and BMW M4 mid-term facelift models, BMW iX1 eDrive25L, and the all-new BMW M5.

In terms of sales growth, Audi's 13.5% performance is better than that of BMW and Mercedes-Benz. This high growth rate is against the backdrop of a significant decline of 8.4% in Audi's sales in the BBA in 2022, compared with 6.4% and 0.9% for BMW and Mercedes-Benz in the current period.

Audi, which is lagging behind in the transformation of new energy, is speeding up to make up for its shortcomings. It is reported that at the end of 2024, Audi FAW New Energy Automobile Co., Ltd., located in Changchun, will officially put into production a new generation of Audi high-end pure electric vehicles based on the PPE platform, and its first production model, the Audi Q6 Le-tron, will be equipped with innovative configurations developed for the needs of Chinese users.

In 2023, Mercedes-Benz's overall sales growth rate is not high, but there are many bright spots in the sales structure. Among them, the high-end luxury matrix achieved rapid growth, with the Mercedes-Maybach brand and G-Class off-road vehicles achieving annual growth of 21% and 22% respectively, while the core luxury matrix developed steadily, and the delivery of long-wheelbase C-class vehicles achieved near-double-digit annual growth.

In the coming year, Mercedes-Benz will unveil 15 new and next-generation products, including the all-new all-electric G-Class off-road vehicle, the all-new Maybach EQS all-electric SUV, the all-new CLE family, and the new-generation EQA and EQB SUVs. The new and new generation products, mainly electrified models, will accelerate the process of new energy for Mercedes-Benz.

The second echelon: Hongqi, Jaguar Land Rover high growth Lincoln double-digit decline

Among the second echelon of luxury brands, Hongqi, Jaguar Land Rover and Volvo performed well in 2023, of which Hongqi and Jaguar Land Rover both grew by more than 25%, while Lincoln, Cadillac and Lexus continued their downward trend in 2023.

As the only luxury brand among Chinese brands, Hongqi Automobile will achieve sales of 370,000 units in 2023, a year-on-year increase of 29.5%, and has been growing for six consecutive years. Among them, the retail sales of new energy exceeded 85,000 units, a year-on-year increase of 135%, and the penetration rate of new energy sales was 23%, ranking first among traditional luxury brands. In terms of models, in 2023, the annual sales of Hongqi H5 and HS5 will both exceed 100,000 units, a year-on-year increase of 40%.

Jaguar Land Rover ranked second fastest among the nine luxury brands, with annual retail sales of 106,400 units, up 25% year-on-year. Among them, the Range Rover family sold more than 44,000 vehicles, a year-on-year increase of 31%, the Range Rover and Range Rover Sport delivered more than 25,000 vehicles, the Defender family delivered more than 19,000 vehicles, a year-on-year increase of 59%, and the Discovery family sold more than 17,000 vehicles, a year-on-year increase of 14%. The annual sales of the Jaguar brand exceeded 25,000 units, a year-on-year increase of 23%, with XFL, F-PACE, and e-PACE contributing significantly.

In terms of sales scale, in the second echelon of luxury brands, Hongqi Automobile sits firmly in the "top spot" with a scale of more than 300,000 units, and the sales scale of several other brands is between 70,000 and 200,000 units. Cadillac, Lexus and Volvo will sell 183,000 units, 181,400 units and 180,000 units respectively in China in 2023, with growth rates of -1.2%, -1.4% and 11% respectively, with a slight sales gap between them.

Among them, Volvo is more active in the transformation of electrification. At present, all models of Volvo except for two station wagons have been launched in new energy versions. In 2023, Volvo will achieve a year-on-year increase of 25% in sales of 7 new energy models in the Chinese mainland market.

In the coming year, Volvo will launch three new pure electric models in the Chinese market, including the pure electric luxury MPV EM90, which has completed its world premiere and opened reservations in Chinese mainland, as well as the new pure electric flagship SUV Volvo EX90 and the new pure electric luxury SUV Volvo EX30.

In contrast, Cadillac and Lexus have been slow to adopt new energy. At present, Cadillac has only launched one new energy model in the Chinese market, the IQ Ruige, and in November 2023, the new pure electric model Cadillac IQ has just completed its Chinese debut. Although Lexus has three new energy models: RZ, RX450h+, and NX400h+, its sales performance is average.

Lincoln is the brand with the most significant sales decline in 2023 among the nine luxury brands mentioned above. In 2023, Lincoln China's annual sales will exceed 70,000 units, a year-on-year decrease of 11.7%, and the decline rate is 1.7 percentage points narrower than that in 2022.

Although the sales of Cadillac and Lexus in 2023 also continued the downward trend in 2022, the decline was 19.3 percentage points and 17.2 percentage points narrower than that in 2022, respectively, and the overall development was relatively stable.

Niche brands: Infiniti and Genesis are yet to improve

As the market becomes more and more competitive, among the luxury brands, there are already some brands that have left the Chinese market, such as Acura and DS. In addition, Infiniti is also performing in the doldrums and the market situation is grim. Genesis, a new entrant to the Chinese market, has not yet found the key to open the door to the Chinese market.

According to terminal sales data, Infiniti's sales in the Chinese market in 2023 will only be 5,060 units, a year-on-year decrease of 20.83%. In the context of the continuous decline in sales, there have been many rumors in the industry that Infiniti will withdraw from the Chinese market. Just recently, it was reported that more than half of the Infiniti dealers have closed their doors and withdrawn from the network, and now there are only 58 stores left in the country.

As a high-end brand under South Korea's Hyundai, Genesis has not been able to achieve a market breakthrough since it entered the Chinese market for the third time in 2021. According to the data, Genesis sold 835 vehicles in China in the first half of 2023. With sales of less than 1,000 units in half a year, Genesis has begun to reflect on the problem. In terms of new models, in December 2023, Genesis released the official image of the G80 mid-term facelift model, which will be released in 2024 and will be introduced in China.

In 2024, with the continuous upward trend of China's new high-end brands and the acceleration of the transformation of traditional luxury brands to new energy, the competition between the two camps is bound to become more intense, and the industry pattern is still highly uncertain.