While Audi, BMW and Mercedes-Benz have long dominated the luxury automobile market in China. However, manufacturers in the second- and third-tier camps are also looking to flex their muscle, with many of them announcing ambitious domestic production projects in the aim of boosting their overall market share. This was incredibly obvious at the recent Guangzhou International Motor Show, where the Chinese produced Chery Jaguar Land Rover Range Rover Evoque and Infiniti Q50L made their debuts.
The benefits of localization, particularly domestic production, are very obvious: decreased costs and improved brand image. For consumers, domestically produced own brand vehicles provide a way for them to buy a luxury brand automobile while still saving on costs. A resident of Foshan, Guangdong remarked soon after the announcement of the domestic production Range Rover Evoque: “Everyone is holding off on purchasing the Evoque until the domestic model is launched, as it will definitely be cheaper than the [current] import version.” The domestic Range Rover Evoque’s (pictured) price is predicted to be in the 350,000 RMB ($57,101) range, over 50,000 RMB ($8,157) less than the current import model.
Even though prices are cheaper, manufacturers aren’t necessarily reaping less of a profit. Take for instance Cadillac, who announced that, following the release of the domestic production XTS, that model’s sales over doubled over the course of just half a year. Guangdong dealerships have pointed out that the domestic version XTS’ sales far exceeded that of the import model.
Both the Cadillac and Jaguar Land Rover brands are making an attempt to wrestle market share away from the big three of Audi, BMW and Mercedes-Benz with their large-scale localization projects. Cadillac is currently preparing domestic production work for the SRX, which will come on the heels of the already domestically made XTS and 300C, the former of which was the first non-German brand luxury automobile to be produced in the country. Jaguar Land Rover, for its part, has teamed up with Chery to bring out the Range Rover Evoque. Geely-owned Volvo has also announced its commitment to domestic production.
One of the concerns Chinese owners have voiced is whether or not domestic production vehicles will be inferior versions of import models. However, Chery Jaguar Land Rover’s Range Rover Evoque seems to have put those fears to the rest, as the measurements and general specifications of the Chinese Range Rover Evoque match the import model. Consumers, dealerships and manufacturers are all looking forward to see if offering from other manufacturers will also be the same.
