With a population exceeding one billion and a voracious appetite for luxury goods, it’s only a matter of time until China overtakes the U.S. as the single biggest market for premium cars. China is already the biggest market for new cars and this year the country is expected to overtake Europe in terms of car production.

Now BMW, the world’s biggest producer of premium cars (when you factor in sales of its MINI and Rolls-Royce labels, too), is predicting China will overtake the U.S. as its number one market by the end of the year.

Sales of BMW's vehicles in China already surpassed those in the U.S. for the first six months of the year, coming in at 182,800 units for China versus the 172,787 units for the U.S.

This may not be much of a gap but Karsten Engel, who heads BMW’s Chinese operations, has revealed to Bloomberg that the automaker is predicting sales to grow at a faster rate before the year is out. He explained that smaller cities in China, particularly those in the west, which are just opening up to luxury sales, will fuel the future growth.

“Strong growth in future will come from the smaller cities, and the strong growth will also come especially from the western region,” Engel said. “There are 100 cities with more than a million inhabitants in China with no premium car dealers at all, so this shows the huge potential we’re having in this country.”

Audi still has the biggest share of the premium car market in China, having sold 228,139 units over the first six months of the year, but BMW is growing at a faster rate. In addition, BMW has established the new brand Zinoro with its Chinese partner Brilliance and plans to start selling the first Zinoro, tipped to be an electrified version of the BMW X1, later this year or in early 2014.

Incidentally, the most popular BMW vehicle in China is the 5-Series sedan.


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