Good for Chery, but foreign partnerships still command over 70% of the market, and Toyota and other Japanese car makers are gaining fast. It will only be tougher going forward.
Hell is freezing...Domestic car maker takes first sales title
By Jin Jing 2007-4-5
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CHERY Automobile Co Ltd said yesterday it has become the first domestic car maker to beat the country's foreign joint ventures in the monthly vehicle sales race.
Anhui-based Chery, China's fourth-largest car maker by sales last year, sold 44,568 units in March, a year-on-year increase of 69 percent, the company said in a statement yesterday.
Shanghai General Motors Co Ltd lost its No. 1 spot by selling 40,570 vehicles last month, 12 percent more than a year ago.
Shanghai Volkswagen Co sold 38,627 units, and FAW-Volkswagen Automotive Co sold 37,016, Chery said, citing industry statistics.
It was the first time Chery's monthly sales topped 40,000, even as Shanghai GM and Shanghai Volkswagen offered significant discounts.
Despite being unseated in the March sales race, a SGM official said the company was satisfied with its own performance, noting that it was still No. 1 for the entire first quarter, with 113,768 units sold.
SVW was No. 2 with sales of 105,000 vehicles, and Chery came in third with 103,000 cars
The Anhui car maker has been climbing up the rankings for the past year as it pursued a strategy of improving quality and keeping prices low. It ranked seventh in national sales last March, moving up to No. 3 in January this year.
"Chery is benefiting from the growing market demand in China's inland cities, where customers are more sensitive to car prices," said Yale Zhang, chief analyst in the Shanghai office of CSM auto consulting.
"The domestic-brand car makers have been working to improve quality and keep their models price-competitive to gain an advantage over the joint ventures."
Chery, a specialist in small-engine vehicles, sold a record 15,294 QQ compacts, which are priced between 33,000 yuan (US$4,285) and 44,800 yuan, in March.
The QQ is about half the price of the compacts offered by SGM and SVW.
Other Chery mainstream models, including the Cowin and A5 economy sedans, each broke the 10,000-sales mark in March and set monthly records.
Chery's exports more than doubled to 10,000 units for the period.
The Chinese partner of DaimlerChrysler AG said that its goal is to increase sales by 29 percent to 393,000 units this year, compared with a 60 percent rise in 2006.
Quite right runningdog. Car ownership in China is still considered to be a status symbol. It is strongly associated with the idea of "face". Obviously the more affluent the person, or household, the higher grade the car is. The Chinese will compromise on living conditions and even food, but will put an extra $20K-$30K into buying a brand name (and the bigger the better).runningdog said:Just an observation from my smaller town in China. I think that the cheaper cars are selling more and more as the relative wealth of the car buyer is moving more middle class. The richer guys (and gals) already got their cars and could afford more expensive ones. Now others are buying but can't afford the more expensive models.
Also, not too many moving up to more luxury models yet and selling their old ones in the used market.
FWIW...from my town.