Medium-small cities lead domestic auto sales figures

In 2009, China has sold 13.6448 million autos, and among the sales volume, over 70 percent of the increment is contributed by consumers in small and medium-sized cities.

Looking forward to the year 2010, Li Yuansheng, Vice Director of Organizing Committee for the Itinerant Auto Exhibition in Top 100 Counties (Cities) of China, indicated that there still exists huge space for increasing the consumption of autos in small and medium-sized cities, and accordingly these cities will become the most primary incremental market for auto consumption in China in the future.

Li Yuansheng, as a famous expert in researching the second and third-tier markets, quoted related data and demonstrated the said viewpoint from two aspects of regional distribution of increased auto consumption and the auto population in 2009.

Firstly, the areas where the consumption of vehicle has witnessed the most rapid increase in 2009 are mainly distributed in those relatively developed prefecture-level cities in Midwest China and rich county-level cities plus their popedom in East China. According to the R-value theory, the per-capita GDP of $3,000 is a critical point for popularizing the auto consumption.

And in 2008, China's per capita GDP has exceeded $3,200, so a mass of families with middle income have had the condition on auto consumption and are taking action in buying autos successively.

At present, in the relatively developed prefecture-level cities in Midwest China and rich county-level cities plus their radiated areas in East China, the total amount of the group who has had the condition of auto consumption is about 300 million persons.

Such a potentially giant consumer group has formed a huge demand scale in the second and third-tier markets. Therefore, with the improvement both in economy and income, the second and third-tier markets are doomed to become the most important fresh activists for auto consumption within a longer time in the future.

Secondly, the same conclusion has also been educed from the analysis on the auto population. In 2009, the number of autos per 1,000 people in China has reached 25 units; however, at the largest third-tier markets, the number was only 5 to 8 units and even less than 5 units in a number of middle-sized cities in the West of China.

In this case, although the auto population has seen an outbreak of growth in 2009, it remained a large room for the population to climb up to a saturated condition in small and medium-sized cities.

Viewing from the analysis on the above two aspects, the huge potential of consumption in the small and medium-sized cities has been far from being exhausted and within a quite longer time in the future, the small and medium-sized cities will still act as the main body market of the increased auto consumption.

Due to the contribution and increasing potential of small and medium-sized cities to the vehicle market, the automotive enterprises have attached more importance to the second and third-tier vehicle markets mainly represented by small and medium-sized cities, and popularly enhanced their impact on brand promotion and channel construction in the second and third-tier markets.

During this course, the marketing platform of a series of campaigns for the itinerant exhibition of autos in top 100 counties (cities) corporately constituted by the itinerant exhibition of autos in top 100 Counties (Cities) of China, which is actively operated in the Eastern China, and the itinerant exhibition of autos in the famous midwest cities, which is actively operated in the Central and Western China, have exerted an important role of drive force.

 Li Yuansheng introduced that during a series of campaigns for the itinerant exhibition of autos in top 100 counties (cities) in 2009, the automotive sales volume has realized 21,678 units with the turnover of more than 2 billion yuan, playing the roles of catalyzer and roll booster.