10% price reduction for Chinese sedan-cars forecast in 2004

Home>>Business

Last updated at: (Beijing Time) Wednesday, January 21, 2004

10% price reduction for Chinese sedan-cars forecast in 2004

DISCUSSION

CHINESE

SEND TO FRIEND

According to latest data from online auto market database Chinese-built sedan-car prices saw an average reduction of 9.05 percent in 2003 which is followed by first price-reducing wave of 9.09 percent in the first 15 days after the New Year's Day in 2004. Experts predicted that the price-reduction record set in 2003 for China-built automobiles would be broken through again in 2004.

China Association of Automobile Manufacturers (CAAM) for the first time announced the exact statistics of 2003's auto industry sales volume on Jan. 16. Last year Chinese auto production and marketing both topped 4 million. The number indicated 4.4437 million and 4.3908 million respectively. Among them the production of sedan-cars were 2.0189 million - up 83.25 percent and the sales were 1.9716 million - up 75.28 percent.

According to Zhu Yiping, Director of Information Department of CAAM, the production and marketing of Chinese automobiles increased by 1,192,500 as compared with that of 2002. The speed was unprecedented in the world history of automobile development. All signs indicate that Chinese auto industry will keep a rapid growth this year. The prediction made by CAAM on 2004's auto sales was 20 percent higher than the sales in 2003 and the production and marketing would exceed 5.3 million. Sedan-cars would still be the driving force in this rapid growth and its production in 2004 would exceed 2.6 million.

The bright prospects in both production and marketing heartened the auto manufacturers who hold ambitious development plans. According to preliminary statistics sedan-car manufacturers planned to produce about 2 million cars in 2004. Geely, Beijing Hyundai, Chery and Guangzhou Honda expected to increase production by 50 percent. But the reality is: stock began to grow noticeably since the latter half of 2003. National auto market began to cool down in December 2003. If the market does not take a turn for the better in the fist half of this year whether auto sales will keep a rapid growth rate is still in question. Manufacturers' excessive production capacity would further increase stocks in the storage and they have no way out but to battle over prices in order to digest the output and retain the occupancy of market share.

Mr. Su Hui, General Manager of Asia Sports Village (Beijing) Automobile Trade Market (ASVATM), said based on the trend at the beginning of this year auto manufacturers and dealers would continue to use price reduction as means for seizing the market this year. The most illustrating example is Lingyang (Antelope). Shortly after its price reduction on the New Year's Day its sales shot up and the sales volume of last week soon climbed to the second place in ASVATM Top Single-week Sales List. Qianlima (Swifthorse) has been out of stock since it reduced the price of 2004 model.

According to Hua Xue, competition over prices in 2004 would still be the major strategy that auto manufacturers use to keep and expand their market shares. It is estimated that the price reduction of China-made automobiles would be around 10 percent or even higher. Some models will go far beyond that estimation. Also some will be ousted from the market through fierce competition.

By People's Daily Online

Questions?Comments? Click here

Made-in-China cars exported to Australia

Mercedes-Benz recalls 17 sedans in China

Exploration rover "Spirit" lands safely on Mars ( 9 Messages)

Two major state banks to pilot joint-stock system ( 3 Messages)

China pondering its own "green card" system ( 16 Messages)

Roaring BMW: Was it "road rage" or an accident? ( 2 Messages)

Beijing's traffic no longer a headache by year 2008 ( 5 Messages)