Chinese Car Makers Must Focus on Home Markets before Working on Global Expansion Plans
|   Saturday, November 02, 2013
China is currently one of the fastest growing car markets although its own car makers are bleeding. According to a leading Chinese Automotive Daily, Chinese car makers must succeed in local markets before they plan on going off shore. With the rise in demand for SUVs and luxury sedans, demand for public carriers has been on a steady decline for some time. Passenger car sales had dropped just below 29 percent last year and if the pace continues, China's automotive industry could face some serious financial threat.


China should export nearly 580,000 vehicles this year, a steady drop since last year, while these vehicles are headed for the less competitive markets in the Middle Eastern countries, Latin America and the African nations. Making a foray into popular car markets such as US, Europe and Asia Pacific markets is still a distant dream.

China will be the core of the automotive industry as we progress into the 21st century although their home made products are yet to make a mark. The major reasons due to this fragmentation, according to Asian Car Industry Consultant Bill Russo, are marketing strategies undertaken by Chinese firms as opposed to their Western competitors. Consolidated Chinese car makers are required to give the West a run for their money although certain measures are currently being undertaken to solve this problem.

Chinese brands have been forging partnerships with one another and outsiders and this strategy is paying off as well as international sales are concerned. However, they need to focus on the needs of their own customers and come up with cheap options providing maximum features to win over local customers. Affordable transportation is needed to get masses back while refinement and quality are major issues.

Poor quality will only earn scorn which is bad for business. The Chinese car makers are facing technology based issues. Their technology is not as advanced as their Western counterparts and this is evident in poor sales figures. Decent partnerships should solve this issue as platform sharing takes much work off any build.

Chinese made 4905 Roewe sold 950 units in home markets, while its sister model, the Buick LaCrosse sold 86,100 units within the same time frame. While Roewe was based on a home grown platform, Buick used the GM Epsilon's platform for its build. Hence, the superiority is easily stated. A few Chinese automakers such as Geely however are performing well across global as well as home markets and if they continue holding their present stature they should come out successful within the next decade.

As of now international expansion is a bad financial move for Chinese carmakers and they need to reconsider their decision fast. European car makers are making good use of this opportunity as well. For example, Skoda's Octavia sells six to one for the MG6 in China. We expect some interesting updates within the next few months and will keep you updated time and again. We will bring you updated sales figures across the Chinese market soon hence stay tuned for latest news and reports.
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