China’s need for speed ‘drives global car market’

W020081223062147474360

 

Young, rich and hungry for speed: a new generation of Chinese drivers is reshaping the global market with their taste for powerful cars, according to a study released on Wednesday (Sep 25).

Asia and particularly China, the world’s second-largest economy, have long been a key market for global automobile manufacturers as they seek to make up for weak demand in the US and Europe.

But a study of 14 countries by French think-tank Cetelem found that Chinese consumers were also set apart by their attitudes to cars, which wealthy young buyers see as an important status symbol. “Ninety-four per cent of Chinese told us that a car is a sign of modernity,” Cetelem head Flavien Neuvy told AFP a week ahead of a major industry conference in Paris.

Chinese buyers see power and safety as the most important factors for choosing a vehicle, he said. In contrast, in 12 of the 13 other countries surveyed buyers looked first at the price of a car and then its fuel consumption.

Already the world’s largest car market, China has become a key focus for major brands such as US giant General Motors and Germany’s Volkswagen, which dominate the market through local partnerships.

Low ownership rates of around 69 cars per 1,000 people, compared to 770 per 1,000 in the United States, the world’s number-two market, also mean it is set to be a key driver for growth in the coming decade.

“In 2005, they were 17 per 1000 and by 2020, they will be 184. In 15 years, they have multiplied the pool per capita by 10,” said Neuvy. “The potential is considerable for all emerging markets, which is good news for all manufacturers.”

China’s car buyers are also much younger than in other countries – on average 35, compared to 52 in the US and 54 in France – and much less likely to be “patriotic” in their tastes. Whereas more than half of drivers in auto manufacturing hubs such as France and Germany prefer national brands, rising to 94 per cent in Japan, in China only around a quarter of buyers shop at home.

Chinese also spend more of their budget on buying and operating their car: 19 per cent of consumer spending is devoted to vehicles, compared to around 11 per cent in France and Germany and 16 per cent in the US.

Cars also cost more compared to salaries in other major markets. Buying a new Volkswagen Golf in China is equal to five years of wages, 13 times as much as in the US. “Americans spend a lot, including operating costs. Fuel prices are lower, but they have bigger cars that cost more in maintenance and they drive a lot,” said Neuvy.

 

 

Source : Channel News Asia | September 25, 2014

Thomas D’Innocenzi

Advertisements

About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
This entry was posted in Business, Economy, Global Sourcing and tagged , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s