The biennial Shanghai auto show has taken a dramatic turn this year, with super luxury car brands that once dominated the exhibition floors now remarkably absent. Two years ago, these high-end brands occupied an entire hall at the National Exhibition and Convention Center, but this week they are largely invisible.
This absence isn’t surprising, given the current market dynamics. The spotlight has shifted squarely to electric cars and vehicles catering to more budget-conscious consumers. Interviews with representatives from these luxury brands are scarce, as few are present and those who are tend to be tight-lipped.
The challenges faced by foreign car sales in the Chinese market have been compounded by the emergence of domestic rivals with advanced technologies. Only a handful of high-end carmakers, such as Bentley, Mercedes Benz, and Porsche, have a presence at this year’s Auto Shanghai.
Alexander Pollich, president and CEO of Porsche China, reaffirmed Porsche’s commitment to the Chinese market, despite a reported 40% drop in deliveries in the first quarter. He praised Chinese car manufacturers for their innovation and leadership in the transition to electro-mobility.
The German automaker’s booth is situated next to one promoting Huawei’s AITO, an electric SUV developed in partnership with China’s Seres Automobile Co. This proximity highlights the changing landscape in the automotive industry.
Guan Mingyu, a senior partner at McKinsey & Co, noted that China has become a ‘testing ground’ for the global car industry. Chinese consumers are now driving the demand for new technologies and models, reshaping the industry in the process.
According to a McKinsey report, while foreign car brands retain their reputation for super luxury cars among Chinese consumers, this prestige is not translating into sales. The report suggests that the goodwill built during the era of gas-powered vehicles is not automatically carrying over to the era of intelligent electric cars.
Chinese consumers have become increasingly budget-conscious, similar to their Western counterparts. While buyers of super luxury cars prioritize looks and performance over price, those with less disposable income are seeking value. Chinese electric and hybrid models, which account for over half of China’s new car sales, saw double-digit growth in the first three months of the year.
In contrast, sales of cars priced at 1 million yuan (US$137,029) or more in China plummeted by 53% compared to the same period last year, with Lamborghini experiencing a 67% nosedive.
The Shanghai Auto Show has transformed from a spectacle for fancy cars to a showcase for practical deals. Visitors are now more interested in new technologies and affordable options rather than luxury price tags. Their purchasing decisions will likely shape the future trajectory of car design, automotive technology, and cost, both in China and globally.
