Last year, the slump in China?s economy slowed down domestic demand, adversely impacted the growth of local companies. To put the economy back on track, Beijing undertook several measures, such as implementing interest rate and tax cuts.
China?s auto sector saw rapid growth in the post-measures period, especially in its luxury car segment. Over the past few months, demand for luxury cars has been growing significantly in the mainland, making the country a lucrative market for foreign luxury car manufacturers.

Despite the slowdown in the world?s second-largest economy, the demand for luxury cars in January has jumped, with Mercedes taking the lead. Last month, sales of Mercedes in China soared to 42,671 vehicles, representing a rapid 52% growth year-over-year. In December 2015, the S-Class maker sold 37,771 cars in China, showing a 13% month-over-month (MoM) incline. The massive growth in sales was attributed to strong demand for the company?s premium luxury brand, S-Class Saloon. The rapidly growing demand for luxury cars in China reflects improved purchasing power of Chinese consumers. Still, despite impressive growth in the mainland, luxury car manufacturers believe that a slowdown in the country?s economy has slightly hit demand for luxury cars.
In the first half of 2015 (1HFY15), rising competition in China stagnated growth of car manufacturers. The situation only worsened in the second half, as the economy cooled down even further, following the decline in the manuf...