Major Reason Behind the Growing Demand in the Chinese Automobile Sector
|   Friday, May 03, 2013
Rapid Expansion in the Chinese car market has propelled the major international car makers to make a dash for capturing a bulk of the country's automobile market. However, if official reports are to be believed, the actual expansion in the country is yet to begin. PSA's major expert, Mathieu Vennin is an expert in the Chinese market and he is confident that within the next decade the demand for vehicles in the Chinese market will be close to 90 Million per year.


This means that there will be a huge increase in demand in the market from the current demand of 48 Million per year. The major markets such as parts of Asia and South America have almost reached their saturation point and this is the best time for the Chinese market to emerge.

This is therefore the major reason behind every major car designer manufacturing their products to suit the Chinese market. This is a market consisting of first generation buyers and as a result building up a brand name with this generation is very important for the long run for any company willing to make a major mark on the Chinese market. China had an annual demand for 12.7 Million vehicles in 2012 and the figures should reach 15 Million by the end of 2013.

The Chinese market is a very important market as over 90 percent of the general population does not own a vehicle. Over the next decade, the demand for automobiles will increase by 30 Million and even then just 20 percent of the population will own a vehicle. The figures are staggering and hence major players need to establish themselves from the beginning. The current statistics show that 50 percent of the European population own vehicles while close to 80 percent Americans own a car.

The demand for four door C Segment sedans is huge in the Chinese market followed by SUVs. Chinese drivers prefer automatic petrol sedans as they do not want to get involved with manual transmission systems. Diesel is not the preferred fuel and just huge HGV's run on diesel motors.

The Chinese Government is also making provisions that help customers opting for a petrol ride and hence this is set to increase the demand for vehicles in China. Volkswagen is currently the biggest stakeholder in China, accounting for 17 percent of the market, followed by Kia and Hyundai. Ironically Buick has an incredible 6 percent stake in the market. The market is growing rapidly and major players such as Nissan, Honda and Toyota aim at enhancing sales.

However, although the sale of the Japanese products was high, the demand is currently faltering over a dispute between the Chinese and Japanese population regarding local territory. Home grown cars are however not filling up this gap between demand and supply. Western car makers are taking advantage of the situation and companies such as Porsche, BMW, Audi, Bentley, Rolls Royce and Mercedes Benz are slowly entering the Chinese market with the innovative range of products.
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