Asia Essentials

Demand for premium brands remains solid

    Based on our proprietary survey of 31 brands in 14 cities, we find thatMercedes-Benz local models and Lexus continue to offer the lowest discountsamong premium brands at 4.5% and 5.4%, respectively. We take an in-depthlook at the outlook for premium vehicles, which we believe will continue totake a larger share of the China auto market as more models are added tolocal production. YTD sales are up 15.2% YoY vs just 0.5% for the passengervehicle market overall. We expect BMW Brilliance models to see discountingfall as new models are launched starting with the new 5 Series in late June.