Luxury cars fastest growing auto segment in China

China's luxury car market is booming. The country has surprised everyone by reporting a higher than expected first quarter GDP gain of 11.1% and that's great news just ahead of the 2007 Shanghai Auto Show that will open to the public on April 22nd this year. Agenda reports that China is the world's second largest auto market and is growing at 15% per year, with luxury cars as the fastest growing segment within the Chinese market.

In early April, DaimlerChrysler's (DCX) Mercedes-Benz unit started selling its high-performance AMG lineup on the mainland. These monsters aren't cheap. The S65 AMG is a high-octane production extension from the Mercedes S-Class lineup and costs about $385,000 in China.

For Chinese consumers interested a muscular V-8 engine and off-road capabilities in a luxury model, there is the Mercedes-Benz G 55 AMG ($245,000) and the ML 63 AMG, a luxury SUV that starts at about $220,000. China is already the No. 2 market for Mercedes best-selling S-Class. And Ulrich Walker, DaimlerChrysler's chairman and chief executive officer of Northeast Asia, thinks the overall demand for luxury vehicles could double from about 150,000 units now by 2010 or so. Other analysts are even more bullish than that.