China is steadily growing to become the world's biggest market for luxury cars. According to McKinsey, the Asian giant will have surpassed the United States by 2020.
Even though luxury car sales are expected to grow within the United States for the years to come, sales in China are and will continue to boom. Over the past decade, China's market for premium cars has grown 36 %. A year.
In the past this immense growth was spurred by government officials Their numbers and budgets grew excessively and resulted in double digit growth for Western manufacturers like BMW and Audi.
Nowadays, government officials only make up one tenth of the Chinese luxury cars market. Still, demand is growing because of women and younger drivers coming from the new rapidly growing high income class.
Surprisingly, China itself is still not able to produce competitive luxury cars. Despite many joint ventures with Western firms and copying best R&D practices, China cannot, and probably will not be able to over the next decade, build a globally competitive car.
Thus, there are plenty of opportunities for Western manufacturers to spur global profits despite their falling domestic demand.