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Auto competitiveness in China improves steadily
Last Updated(Beijing Time):2009-02-20 09:21

By Zhang Ya

"We firmly believe that China market will surely have a bright future and the auto market will also develop in 2009." Recently, Xiao Shenbo, member of management director board of AUDI expressed in an interview that AUDI would not change its investment plan of research and development and would exploit the market by good products.

In fact, before the rapid changes of global economic situation, either AUDI or joint-venture brand or self-owned brand all showed confidence to Chinese market, which was originated from positive judgment of the development environment and certainty of own advantages, and also from the active and effective strategic adjustment of the company.

It's said that Chinese auto market is the most complex and the most inclusive one in the world. By classifying consumers in each area based on income, culture and consumption custom, we'll find that there are many different consumption groups. It's because of this huge and diversified market that auto companies are exploiting space for development.

"Though our sales in east area were impacted by the international financial crisis, business in middle and west areas of China keeps increasing which can balance changes in sales volume." He Junjie, general manager of Mazda sales operations of Chang'an Ford said, despite the short-term market adjustment, they felt confident to the mid-long-term development of the company. "Our product development is processing according to the plan without being disturbed. Perhaps feeling worried about future, consumers will keep an eye and postpone plan of purchase, but market demand still exists."

This idea has been accepted by many insiders. At present, the new round of escalation of consumption structure hasn't been completed in China and powers pushing consumption growth still exist. In big cities of high per capita GDP, auto consumption is transferring from popularization to replacement. Huge market in secondary or tertiary cities and rural areas still need assistance of large number of vehicles to achieve a fast economic development. As the state is enhancing investment to infrastructure construction and speeding reform in rural areas, a new round of driving effects in domestic auto market will be visualized gradually.

Besides the market advantages, during the process of reform and opening up to the outside world, capability to adapt to globalization and market changes of auto companies in China has been greatly strengthened, and the ability of anti-risk and self-recovery has been reinforced continuously.

The reform and opening up to the outside world not only has brought advanced product technology and manufacturing technique to auto industry in China, but also accelerated auto industry development. The auto output in China in 1978 was 149 thousand, occupying only 0.35 percent of the world market shares; with a total production value of about RMB6 billion yuan. In 2007, the auto production in China reached 8.88 million, occupying one eighth of the world shares, with a total production value of over RMB2 trillion yuan. The reform and opening up to the outside world has greatly enhanced the international competitiveness of China's auto industry.

China's auto industry met with some difficulties in 2008. Actually, during the years of fast development, China's auto industry also had encountered slow growth and unfavorable situation.

"For example, during the years from 1979 to 1982, from 1985 to 1986, and from 1988 to 1990, auto output had experienced decrease and shrink." When concluding the development of China's auto industry during the thirty years, vice president of China Machinery Industry Federation, Zhang Xiaoyu said so, from a development view, though China's auto industry was facing severe competition and market situation, China's auto industrial strength had been improved and was quite different from the past. The anti-risk capacity was deeply enhanced. Future development was still prosperous.

It's because of the experiences in market competition for long that many auto companies has built sound basis, and is always adjusting strategies, that is, by improving brand, quality and service to transform increase pattern of the company.

From 2007, GEELY has stepped into a wholly new product strategic arrangement period by improving product quality and brand connotation. "The sales volume and profits in 2008 both exceeded than ever, thanks to the successful product transformation." Liu Jinliang, vice president of Geely Group and general manager of sales operations, expressed Geely had made fast progress in service satisfaction in 2008. "Customers' satisfaction will certainly go up with better quality. In the present economic situation, consumers will be more realistic. 2009 will be a year for small-size vehicles and economical cars."

"Chery will transform from building self-owned brand by independent innovation to building international famous brand by continuous innovation." Chery published this news on the offline ceremony of the one millionth car. Since then Chery began to fix future development direction as to stabilize price system, improve vehicle quality, develop model potential, actively decrease and slow down increasing speed, upgrade service level and elevate customer satisfaction.

"Make full use of time to strengthen own power. Then spend more on product structure adjustment and on development pattern study." Just as Chen Jianguo, director general of Industrial Coordination Department of National Development and Reform Commission, said on 2008 International Forum on Chinese Automotive Industry Development held recently, reduction of cost couldn't assist auto companies to shake off poverty; only by accelerating organizational structure adjustment and product structure adjustment could basically drive domestic auto companies to develop continuously. 
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