John Zeng, an IHS Global Insight analyst in Shanghai remarked that “If Volvo chooses China as its second home market, that’s probably going to trigger a price war in the premium segment.” He also stated that “cars can sell for 50 percent more in China than in the U.S.”

Ingolstadt, the Germany-based Audi signifies to oppose its leadership position and has programs to sell 200,000 cars in China in 2010 which is up from 159,000 last year. BMW sold 90,500 vehicles in the country in 2009.

With so much at chance, all three auto manufacturers program to broaden local production. BMW is elaborating its present Chinese factory and constructing a second one at a cost of 560 million euros to more than twice its capacity and build around 100,000 vehicles. Daimler, the world’s second-largest luxury auto manufacturer, at present has capability to build 100,000 C- and E-Class models at a Chinese plant. Daimler Chief Executive Officer Dieter Zetsche said last week “The potential of the Chinese market remains enormous, and our targets are correspondingly ambitious.”

John Bonnell, who is the director of Asia-Pacific forecasting for J.D. Power & Associates and located in Bangkok, said “We expect competition to pressure prices should the market slow.”