Over the past 10 years, the luxury car market has grown consistently, with several brands growing to financial and sales volume peaks in their history.
Yearly Luxury Vehicle Sales (2014-2024)
*The Graph includes annual sales by Aston Martin, Bentley, Bugatti, Ferrari, Koenigsegg, Lamborghini, McLaren, Pagani, Rolls-Royce, and models above the €150,000 mark from Porsche, Lotus, Maserati, Audi, Mercedes, and BMW.
While in the aftermath of the pandemic, it took only two years for the luxury market to reach and exceed the previous peak reached in 2019, the trend that seems to emerge and that could be confirmed in 2025, considering the volume reported so far by major OEMs is one of gradual slowdown or, in a worst-case scenario, stagnation.
A big factor in this trend could be the radical transformation of the Chinese market. Because, in this growth over the 2010s, the USA has almost always been the largest single-country market for most of these OEMs. However, a close second, and quickly growing (for some even larger than the US), has been China.
Porsche is one of the best examples of this. After a launch in 2001, by 2015 China had become the single largest market for the German automaker and has remained so up until 2023, when, with a 25% share of sales overall, it was overtaken by the USA at 27% (while Porsche still recorded a healthy +3.3% volume growth). And this is part of a larger trend that can be observed across different companies.
A luxury slowdown in China
By looking at regional sales from automakers that shared the data over the past few years, it is evident a gradual slowdown in the Chinese market across the industry.
Luxury Automakers Yearly Share of Sales in the Chinese Market (2021-H1 2025)
Since 2021, the one company that has remained more stable and for which China was never the largest market, as a much larger share of its sales relies on European Markets, with a sizeable one in the US as the largest single market, is Ferrari. Despite this, Ferrari too shows a slight decrease from the 2022 peak. A similar situation is observed for Bentley, for which China sales share remains quite stable, and a more noticeable slowdown is visible only in 2025 so far. It must be noted, however, that while shares for the British companies have remained mostly unchanged until last year, the overall sales figures haven’t. Sales in 2024 for Bentley were 30% lower than in 2022.
In the middle is Aston Martin, for which this decrease has been more evident, from a 29% share of sales in China in 2021 to 20% in 2024 and 2025 so far. The company, though, similar to what has been just said for Bentley, has also experienced a sales slowdown in 2024, and likely in 2025 too, albeit less dramatic than that of its British competitor.
Worse off, in this overview, instead appear Porsche and Lamborghini. With some ups and downs for the first one and consistent growth for the second, their presence in the Asian market has shrank more markedly than for the others. Both companies under the VW umbrella have seen their share of Chinese sales halved over these four and a half years. Porsche went from over 30% in 2021 to just 15% so far in 2025, and Lamborghini over the same period from 11% to just 5%.
Why is this happening?
The Chinese automotive market has not slowed down, but actually kept growing after recovering from the pandemic, reaching 30 million in 2023, exceeding that in 2024, and 2025 seems on track to get even higher.
China Passenger Vehicle Quarterly Sales (2021- H1 2025)
However, Chinese customers are increasingly buying domestic brands, vehicles, and technology. The introduction of EVs has been the perfect opportunity for the Chinese government to push for a fast change in a market that had been dominated by European automakers up until a few years ago. This came mostly thanks to their performance, quality, and brand equity, all coming from a much longer experience. The most established segments, therefore, were the premium and luxury ones. On the volume side, while foreign OEMs had a consistent share, that was already decreasing earlier due customers’ price sensitivity and Chinese OEMs’ lower prices.
So when it came to luxury, the introduction of the electric powertrain leveled the playing field in terms of performance, and domestic companies also learned throughout the 90s and 2000s’ joint ventures with which foreign brands entered the Chinese market. Additionally, Chinese brands were better at interpreting their customers’ preferences and offering them a new automotive experience focusing much more on software capabilities and convenience features compared to their European counterparts.
Some of the legacy luxury OEMs are actually going back to older solutions like the manual gearbox because their average customer wants that feeling of driving engagement that is lost with increasing automation. Chinese companies instead went in the opposite direction, going all-in on technology and creating a new and highly customizable experience for a customer base that generally has not the same long-standing attachment to combustion engines and the feeling they bring. Thus, it does not have the same expectations of driving performance from a luxury brand, but is actually showing to care more about technology.
*Xiaomi SU7 interior
With significantly cheaper prices, many Chinese OEMs offer an in-vehicle experience that aims at driving performance but also a lot more, while the value proposition of European OEMs offering has likely become somewhat less relevant to the point where even the stronger branding cannot compensate the perceived lack of features and technology.
Can European OEMs turn this around?
The stronger players in the sector are managing to keep stable sales and constantly improving financial results thanks to significant increases in revenues coming from personalisation programs.
This strategy has been working very well for most players involved, led by Ferrari and Lamborghini, but also OEMs in more uncertain conditions, like Aston Martin, have reaped the fruits of this trend improving consistently their average selling prices over the last few years.
A gradual diversification of the product lines with the introduction of fully-electric vehicles that have currently been postponed for most luxury OEMs, could bring back the interest in the Asian market. However, improving success in a single market, however large, might not warrant the substantial investment needed for the development of these models.
The other option could be to gradually shift toward even more exclusive and limited models with a strategy closer to what the likes of Koenigsegg or Pagani have been doing. This would definitely shake the current company structure for these established OEMs, but potentially ensure strong profits with a more limited production that could also shield customers from depreciation that has been plaguing the segment lately, even for limited-run models.