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Global Automobile Manufacturing Getting Closer to China for Heating

Chinese people think a crisis as a turnaround. Backed by surging automobile demand and slowing Chinese economy, Chinese makers unveiled many new automobiles at recent SIMS, including high-end to low-end, sedan, SUV and MPVS, showing the confidence of local makers in the automobile market. The major 

automobile makers from Europe, USA, Japan, and South Korea also participated in the Show. The number of exhibitor increases from 1,300 in 2007 to 1,500 in this year with 500,000 visitors. 

At SIMS, you will not feel global auto industry is falling in crisis but at the height of growth. Meanwhile, in the first quarter, China overtook USA as the largest market in the world. Not only GM, Toyota, Volkswagen and Daimler, but also all other automobile groups have come to the Show, which is more popular than North American Automobile Show at the beginning of the year. 

David Stokols said, “I believe no one will doubt potential and capacity of Chinese market." Stokols is the head of an automotive market research firm based in Los Angeles, which set up a branch in China in 2004 and now has 10 employees in China, while only 80 employees in the whole company. Stokols believes Chinese market is very important and offers great opportunities for the auto-related industries. 80 carmakers are competing in Chinese market, but many local carmakers still have small scale and narrow orientation. “Chinese auto market is full of opportunities and uncertainties, just as European auto industry in a free-for-all state a few decades ago. The automobile consumers are not mature, and confused on too many models; this also creates an opportunity for local automakers for development.” Stokols' company can develop strategic plans and suggestions for brand growth of such Chinese automakers and help these Chinese companies with a shorter history to enter the mature markets such as USA. 

Chinese auto market was sluggish in 2008, and the government made tax-cutting plans rapidly to stimulate its development, finally taking effect at the beginning of the year. Compared to the rebound in Chinese auto consumption, European and American auto markets are in a slump, and major auto groups are sounding alarm, and Toyota is also suffering from loss. Acting as the president of Asia Pacific Region of GM, Nick Reilly said “SIMS has become an important international auto show in the world in terms of exhibitors and exhibition size.”

Porsche will unveil its first sedan–Panamera, at SIMS. As CEO of Porsche, Wendelin Wiedeking said: “It is a clear signal that we see China as the most important market, and we are confident in the growth of Chinese economy and luxury auto market.”

The export to USA market is a goal for Chinese auto brands, although Chinese automakers shall improve the quality and meet the standards of U.S. government. Stokols believes Chinese auto companies are interested in export to Europe and USA, but they shall be attractive enough in quality, brand and corporate culture. Chinese auto companies are good at cost control and low price strategy, especially highly competitive in minicar market. Affected by the financial crisis, the purchasing power of American consumers is greatly reduced, and the cheap automobile at a price lower than USD 10,000 becomes new favorite in American market. This is what Chinese manufacturers are most adept at.

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