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Chery & Geely quality nose dives as they cut cost. Price down, quality down too.

13K views 21 replies 14 participants last post by  superidler 
#1 ·
http://www.automotiveworld.com/AEM/content.asp?contentid=56214

China: Price war hits vehicle quality; Geely and Chery singled out
By Automotive World staff writer (SS)

23 November, 2006
Source: Automotive World

According to the 2006 China Automobile Customer Satisfaction Index (CACSI), a price war is affecting the quality of domestically-made cars with 77% of vehicles showing defects during the first six months of ownership, local newspaper China Daily, reports.

The survey, conducted by the China Quality Association, points out that major defects involve tyres, air conditioning and braking systems as well as locks and steering wheels.

It is estimated that for every 100 new cars, there were an average of 338 defects, far higher than last year's 246.

The China Consumers' Association says it received 1,038 complaints in the first nine months of this year, up by 21% from 2005, and during the third quarter, the number was 44% higher compared to the second.

Industry analysts say that in the past few years price cuts have averaged about Yuan 10,000 (US$1,250) annually, forcing VMs to purchase low quality components to lower costs. In addition, shortened product launch cycles are also taking a toll on vehicle quality due to shorter research, development and testing periods.

According to Fan Tianshun, director of the customer affairs office of the China Quality Association, this year alone more than 100 models have been, or will be, launched. Statistics from the China Automobile Industry Association points out that more than 3,000,000 cars were sold in the first 10 months of this year.

On the other hand, this year's customer satisfaction index has improved, albeit by only 0.1% from last year. Cars with prices ranging between Yuan 50,000 (US$6,359) and Yuan 100,000 (US$12,719) registered improvements.

The First Automotive Works-Volkswagen Jetta ranked first and Geely ranked last in the customer satisfaction. The Chery QQ and the Chang'an Alto also attracted negative comments.
The CACSI survey was based on 4,648 participants in 36 cities in 25 provinces. The 16 major domestic brands surveyed accounted for 72% of all cars sold in China in 2005.
 
Discussion starter · #3 ·
Is there similar stats for American/European/Japanese car manufacturers?
Cars sold in the US average 110~160. German cars easily exceed that and are considered lemons in the US market.

One note, seeing as the Jetta is quite possibly the most widespread car in China, its no wonder it got the highest number of complaints
No, Jetta received fewest complaints per 100 cars.

, same for QQ's - they seem to be EVERYWHERE up and down the east of China.
And receiving the highest number of complaints per 100 cars.
 
Discussion starter · #17 ·
Too much competition is only hurting the Chinese car industry without really benefitting the Chinese consumers. Too many manufacturers is leading to too much being spent on development and fixed costs.
But you can't do anything about it, since all of chinese automakers with the sole exception of Geely are local government owned job programs.

In my ideal world, initially full-line-up Chinese Auto Manuf (3-6) would jointly (not on every model, at every location, all the time) design and develop 5 types of platforms: Toyota Yaris, Honda Civic, Rover 75, Ssangyong Kyron, Toyota Hiace; 3 engines 1.6L & 2.0L diesels, 1.8L petrol; 2 gearboxes 6spd manual & 6spd auto and have grouped (in pair/threes) dealerships in overseas markets to cut their distribution & marketing costs.
Won't happen. Too many conflicting interests and politics in China.
 
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