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China to become world's biggest
automaker
SHANGHAI - China
will become the world's biggest auto manufacturer
in the next three to five years, said leading
European consultant organization Capgemini.
"International auto companies cannot wait for
their piece of the pie," said Peter Kroll, company
vice president.
General Motors,
Volkswagen, Toyota and Nissan are busy
establishing manufacturing bases in the vast and
low-cost Chinese market. Kroll said China has
attracted 60 to 80% of these companies' total
investment in the international market. "Whether
or not they can gain success in China will be
decisive to the future development of the auto
giants," Kroll said.
Many transnational
companies have chosen to close down car factories
in their own countries and transfer them to China,
meaning China will also become a huge source of
car exports. On the other hand, the potential of
China's domestic auto market is great, Kroll
added.
Despite having a per capita GDP of
only US$1,000, China's rising middle class has
shown increasing purchasing power. He predicted
that China's auto consumption will grow, prices
will decline and auto loan and leasing services
will become more widespread.
Capgemini
surveys show that the psychology and tastes of
Chinese auto buyers are somewhat different from
those of consumers in other countries. For
example, Kroll said that Chinese consumers buy new
cars, not secondhand ones. When they decide to buy
a car, they prefer to listen to the advice of
family members, friends and colleagues instead of
reading automotive publications or receiving
professional evaluation services.
Few
Chinese buyers show devotion to a particular
brand. They seldom buy the same cars from the same
retailer, Kroll said. Also, 70% of Chinese
consumers are first-time car buyers, which means a
huge commercial opportunity, according to Kroll.
China's entry into the World Trade Organization
(WTO) has brought a sharp fall in car taxes.
Chinese consumers therefore expect lower prices
for both imported and domestic-made cars, said
Kroll. Many prospective buyers are now taking a
wait-and-see attitude, depressing demand in the
auto market.
Growing production material
costs and higher oil prices have complicated the
auto industry as a whole. Kroll said many local
auto makers must quickly respond to the question:
how will they keep and develop their own brands
during the period of cooperation and competition
with the transnational giants?
To solve
the problem, he advised Chinese auto makers to
learn from the experience of the Eastern
Europeans, who faced the same difficulties ten
years ago. Kroll said the Romanian Dacia auto
company is a successful example. It managed to
optimize the design, improve the quality and cut
costs of its own cars with the help of its partner
Renault's technological platform, management
experience and sale network. Not only has Dacia
kept its brand, but it has also seized a larger
market share in Romania.
(Asia Pulse/XIC) |
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