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Foreign auto brands scramble for low-end niche

By Hao Zhou (chinadaily.com.cn)
Updated: 2008-05-06 18:08

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Facing a prosperous auto market, which is expected to reach 10 million vehicles in sales volume and expanding more than 20 percent every year, no sharp-nosed auto giant would want to ignore China. Most have connected with one or more Chinese automakers to produce medium- and high-end models locally.

However, now that global automakers are trying to cater to medium- and low-end niches, traditionally entrenched by independent Chinese auto manufacturers, the traditional balance is doomed to end.

At the recent Beijing Auto Show, domestic automakers like Geely, Chery, and BYD all did good jobs of showcasing their latest technological development and new marques, and new energy models in particular.

"This is the best show ever for homegrown Chinese automakers, suggesting they are making substantial progress in research and development and marketing," said Li Chunbo, analyst at Citic Securities.

But they "performed not well in first quarter sales," indicated Chinese renowned independent auto analyst Jia Xinguang. "They are confronted an arduous future."

Statistics from the China Association of Automobile Manufacturers showed 62 passenger cars producers' sales in China surged an average of 20.41 percent year on year in the first three months this year, but no independent Chinese makers grew faster than the average.

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The full text is available in the May Issue ofAuto China