Market share of independent brands spiral up
- Source: Global Times
- [17:59 January 19 2011]
- Comments
The market share of domestic auto brands increased in 2010, according to a report on Chinese automobile industry published by the Ministry of Industry and Information Technology Tuesday (MIIT).
The report showed that sales of domestic brands' passenger cars unfolded remarkably, to 6.27 million units in 2010, covering 45.6 percent of the total sales in the market, and their market share rose by 1.5 percent. Sedan sales volume last year was of 9.49 million units, among which 30.9 percent were domestic, 2.93 million units. The market share of domestic cars increased 1 percent, 8 percent higher than that of Japanese cars.
Although the sales volume has been rising for seven years continually (since 2004), development of domestic cars has stumbled. The new policy to deal with traffic congestion in Beijing is a big blow to the industry's advancement and many Chinese automakers have now to withdraw from Beijing. The price slashing by joint ventures also threatens the survival of independent brand vehicles, for they are flooding the market mainly by their low-price strategy.
Now Chinese domestic automakers can no longer solely rely on policy support; and they begin to shift their focus to second or third-tier cities.
"It's a critical turning-point for Chinese auto market. First-tier cities' auto markets are saturating, and there is little room to grow for mid and high-end vehicles. The only way out is to go out and expand in second or third-tiers," Zhang Zhiyong, an expert at China Automobile High-tech Industrialization Commission said. According to him, consumers in second and third-tier cities attach more importance on practicality and price rather than brand name.
