Once again, that's catywampus. Bites the big one several times over!
The biggest auto market has the highest auto price?
CAAM (China Association of Automobile Manufactures) released the latest sales figures today. In 2008 8.6 million vehicles were sold in China and for the first 11 months of 2009, the number is 12 million. When Europe and America are struggling to keep their automotive industry as a whole piece, China is trying to control the growing speed to make it healthier.
Yesterday China Passenger Car Association (CAPA) released its market data for November as well, according to CAPA in November China sold 1.04 million passenger cars. During the same period passenger car sales in America is 745 thousand.
The only uncertainty remains in December is not which country will be the biggest auto market in 2009. People are concerning more about “Can China break 13 million annual sales record?”
Right before the data released, Mr. Dong Yang from CAAM told CBN reporter that he estimated the annual sales can break 13 million. In an interview earlier Chen Hong, president of SAIC also made a 13.4 million forecast for the whole China auto market in 2009.
The most optimistic estimation about America auto market is from GM’s chief analyst Mike DiGiovanni, he estimated a 10.8 million in an interview to a local media.
The market is booming but the booming did not make the average price in this market cheaper. In November retail prices of smaller car segments even increased. But in November America, the promotion campaigns by automakers are starting together with Thanks Giving and Charismas.
GoChinaAuto made a comparison about the prices of same car in China and America, then draw a conclusion that America cars’ prices are much higher that China. Take Camry as an example, 2.4L Elites priced at 149,000 RMB in America but the same model priced at 199,800 RMB in China. If you still think the price gap in standard car segment is reasonable, let’s take a look at the gap in high-end segments. Audi A6 has been localized in Changchun China. Top version of A6 priced at 696,000 RMB but the same model’s price in America is only 348,000 RMB. We know Audi has no plant in America but China is the biggest market for Audi and since 2008 the Germany automaker was building its second plant here.
Yes, China auto market is booming, but what customers can benefit from it?
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I totally agree that is sucks - but it doesn't necessarily mean that Audi is making more profit on their chinese cars. This extra money is "keep the wheels greased" money (in America it would be called "campaign contributions"). As long as the market is still willing to pay these prices here, and as long as the "campaign contributions" keep coming in, the system will never change. The one thing chinese consumers CAN do? Buy chinese cars. If sales of these overpriced cars suddenly dropped because the consumer decided to say "enough is enough" and bought chinese branded cars, THEN possibly the prices would drop. Again though............probably won't happen. Too many new millionaires with "new money" that want to show off their status - and that means having a Audi or BMW or Benz. Chinese car companies simply don't have anything to match that as far as status symbols, and these "new money" people don't think twice about dropping 700-800,000rmb on a nice status symbol. And now to complete the cycle........since some of this "new money" ends up being "campaign contributions", the system feeds and supports itself very effectively. What a world we live in nowadays.
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