Premium cars are a key element in the automotive industry. Not only are they the object of desire for many drivers around the world, but they also represent an important source of profit for manufacturers. Moreover, they are usually the first cars to test the latest available technologies. Therefore, they are crucial for the development of the industry.
Premium refers to those cars whose price is usually above average and which are positioned as something more exclusive than the usual mainstream cars. However, there is no single definition.
My conception of premium includes all models sold by Audi, BMW, Mercedes and their Japanese (Acura, Infiniti, Lexus), Korean (Genesis), US (Lincoln, Cadillac, Lucid), European (Alfa Romeo, DS, Jaguar, Land Rover, Volvo, Maserati, Polestar) and Chinese (Hongqi, Avatr, Hiphi, IM Motors, NIO) rivals.
Then there are the luxury and sports/supercar brands such as Alpine, Aston Martin, Bentley, Bugatti, Ferrari, Lamborghini, Lotus, Mclaren, Morgan, Pagani, Porsche and Rolls-Royce. All these premium and luxury vehicles accounted for 15% of global car sales in 2022. But where are these cars produced?
Germany über alles? Not any more
Contrary to popular belief, and despite the strong global presence of Mercedes, Audi and BMW, Germany is not the leading producer of premium cars. You guessed it: it is from China that most of the premium/luxury cars sold in the world come from.
Data collected by JATO Dynamics show that in the first half of 2023, premium cars made-in-China accounted for almost 29% of global sales. China is a must for any such brand. There is a huge appetite in the Asian giant for premium and luxury cars, MPVs and SUVs, which means that most brands operating in the premium segment are already producing their products there.
In fact, about one third of the sales of the three German premium brands correspond to vehicles produced in China. Some are even sold outside China, such as the BMW iX3.
In second place is Germany, which still holds an important position in the production of premium cars for sale in Europe and global markets. Traditional models such as the Audi A4, Mercedes C-Class, E-Class, GLC, S-Class and the BMW 3, 5 and 7 Series usually come from German plants. This sector is crucial for the German economy, which knows that by producing top-of-the-range cars it can maintain profitability.
The United States, Japan and Hungary are the three other countries where high-end car production is still relevant. While the first two have maintained their position since the 2022 figures, the Eastern European country has overtaken Sweden to become the fifth most important producer of this type of vehicle.
Hungary has become an important location for the production of compact premium models from Audi and Mercedes.
The author of the article, Felipe Munoz, is Automotive Industry Specialist at JATO Dynamics.