U.S. brands fight hot local brands in China
China's light-vehicle market is charging ahead, barely slowed by a slump in early 2005.
BEIJING -- China's light-vehicle market is charging ahead, barely slowed by a slump in early 2005.
Sales rose 26.9 percent to 3.1 million units in 2005 compared with the previous year, according to Automotive Resources Asia, a consulting firm in Shanghai.
For comparison, 5.7 million light vehicles were sold in Japan in 2005.
In January, China sales leaped an astounding 89.1 percent to 323,216 units from a weak January 2005.
Chinese brands, armed with hot-selling small cars, led in January, capturing 28.7 percent of the market. Chery Automobile Co., which plans to export to the United States in 2007, was the top local brand, with 7.0 percent of the market.
U.S. brands captured 14.0 percent of the market, led by General Motors at 10.7 percent.
"This year will be a local OEM year," predicts Yale Zhang, director of Greater China Vehicle Forecasts with market forecaster CSM Worldwide in Shanghai.
The Xiali Charade, a sedan selling for 38,000 yuan, or $4,700, assembled by Tianjin FAW Xiali Automobile Co., was the top seller in January at 19,138 units, according to Automotive Resources. "It is cheap, durable and easy to repair," Zhang says.
Sales rose 26.9 percent to 3.1 million units in 2005 compared with the previous year, according to Automotive Resources Asia, a consulting firm in Shanghai.
For comparison, 5.7 million light vehicles were sold in Japan in 2005.
In January, China sales leaped an astounding 89.1 percent to 323,216 units from a weak January 2005.
Chinese brands, armed with hot-selling small cars, led in January, capturing 28.7 percent of the market. Chery Automobile Co., which plans to export to the United States in 2007, was the top local brand, with 7.0 percent of the market.
U.S. brands captured 14.0 percent of the market, led by General Motors at 10.7 percent.
"This year will be a local OEM year," predicts Yale Zhang, director of Greater China Vehicle Forecasts with market forecaster CSM Worldwide in Shanghai.
The Xiali Charade, a sedan selling for 38,000 yuan, or $4,700, assembled by Tianjin FAW Xiali Automobile Co., was the top seller in January at 19,138 units, according to Automotive Resources. "It is cheap, durable and easy to repair," Zhang says.
Strong growth
| ||||||||||||||||||||||||
John Bonnell, director of Asia forecasting for J.D. Power ARA Forecasting, also likes local manufacturers. He sees total market sales rising about 15 percent this year. "Chery and Geely are two key brands," Bonnell says. "They are gaining volume in the B segment. The growth is price driven, with maybe some nationalism mixed in." Geely also plans to sell cars in the United States, starting in 2008. The B segment is a term for small cars about the size of a Chevrolet Aveo. A-segment cars are smaller. Overseas brands this year will be hurt by a shortage of small cars, says Sun Jian, a principal with A.T. Kearney, a consulting firm in Shanghai. "Foreign manufacturers will have to broaden their product lines because there is a lot of global competition in the A and B segments," he says. A.T. Kearney forecasts 20 percent market growth this year. GM is still doing well with the mid-sized Buick Excelle. The sedan was the third best-selling car in January at 15,900 units. |
