The Chinese auto market may be booming, but it looks as though drastic changes are on the way. Just as U.S. car buyers are shifting from large, inefficient vehicles to smaller fuel-efficient models in the face of rising energy costs, Chinese car buyers are starting to make similar changes.
Most of the success by the world’s automakers in the Chinese market has been in the mid to premium vehicle segments — vehicles that retail from $20,000 and up. Chinese consumers grew found of these types of vehicles because they were seen as status symbols and automakers were happy to supply such vehicles because they promised the largest profit margins. But as fuel prices continue to rise and a new class of drivers emerge, Chinese buyers are looking for smaller, less expensive and more fuel efficient vehicles. The push toward more efficient cars would also help China with its growing pollution problems.
In order to meet this new demand, several automakers are planning to bring some of their fuel-efficients to China or already have all-new models under development for the Chinese market. Toyota will show its Yaris sub-compact at the Beijing Motor Show this week — which will hit the Chinese market this fall — and General Motors is strongly considering a new China-spec car that would retail for about $4,000.
“Most of the growth (in China) will occur in the mini to lower-medium segment,” Nick Reilly, General Motors’ group vice president and head of its Asia Pacific operations, told Automotive News. Despite aiming for a lower segment, Reilly says that GM is not planning to produce a direct rival for Tata’s $2,500 Nano microcar.
GM is currently developing its Beat city car for sale in China, but it is believed that the Beat will retail for more than $4,000.
But just as foreign automakers are just now trying to break into the small car segment, Chinese automakers are trying to break into the premium segment. According to J.D. Powers, China’s top three automakers with no foreign affiliation (Chery, Geely and Great Wall) only account for 28 percent of the market — a statistic largely due to the fact that these automakers don’t offer vehicles in the $20,000 and up segments. The premium vehicle segment makes up about 33 percent of the total market in China.
Wang Fengying, an executive at Great Wall, admits that Chinese cars have a lot of ground to make up if they ever want to compete with the likes of Mercedes and BMW. Fengying cites poor quality and derivative styling as the biggest hurdles.
“These are the biggest challenges facing us now,” she said. “Many Chinese car makers, especially those with their own brands, are determined to go international. The coming years will be crucial for our growth and expansion.”
04/18, 12:26 PM
posted by:
RaineMan
Well… it was $40 to fill up my 11 gallon gas tank today. Maybe I need to go over to the Honda dealer on lunch and see about trading for a Fit… these small cars are kinda nice.
04/18, 1:35 PM
posted by:
HemiRoadRunner
Maybe I should just strap a 4 banger to a shopping cart and called it the next generation Fit…..
04/18, 1:36 PM
posted by:
Commodore
Your comment RaineMan hinted at being an advertisement for a Fit or something
04/18, 1:59 PM
posted by:
LaCaLover
I hate the chinese
04/18, 2:14 PM
posted by:
RaineMan
At this point… if there was a motorcycle with a roof that I could ride year round in the rain and snow… I’d buy it.
04/18, 2:17 PM
posted by:
LaCaLover
Wait for the 2009 model year Fit, it is way superior to the current model
04/18, 2:30 PM
posted by:
mayer_ray_nagin
Raineman apparently thinks that if he puts 11 gallons into a Fit it will cost less than $40. He’s as big a dummass as the reatrd in that flick.
04/18, 2:33 PM
posted by:
mayer_ray_nagin
And if you don’t know what a “reatrd” is, then you are a freakin retard.
04/18, 2:38 PM
posted by:
HemiRoadRunner
My Road Runner is a hybrid, it burns gas AND rubber.
04/18, 2:47 PM
posted by:
Impulsive
‘mayer’, congrats on quality and humour.
04/18, 2:52 PM
posted by:
Madcapp
Build bicycles for the chinese. That’s pretty small and efficient.
04/18, 2:54 PM
posted by:
HemiRoadRunner
They did, they were called rigshaws, like a carriage. Then we started buying all their crap and now they have more money than most working people from the sound of how many cool cars they are getting over there.
04/18, 3:35 PM
posted by:
HemiRoadRunner
What really pisses me off is on this story they show a picture of the chinese flag. Where’s my matches……….
04/18, 8:51 PM
posted by:
autonut
All bicycles are build in China nowadays.
Well, 11 gallons will cost you $40 in a Fit, but you can travel over 400 miles on it. That’s what 5.7L Hemi will use from traffic light to traffic light by burning rubber.
04/18, 9:56 PM
posted by:
HemiRoadRunner
5.7??? It’s a crate 426. Who the hell would put a small block in a Road Runner?
04/18, 10:27 PM
posted by:
Veda
The new gen Fit seems like a very nice economical car, what’s not to like? If you’ve been to China you’d agree that micro/mini cars are the future. With many people riding on bicycles in the past, the only way their roads can fit cars is if they go with ultra small cars. Probably the same amount of pollution due to the volume though…
04/18, 10:34 PM
posted by:
johnnycanuck
autonut: all bicycles sold at WalMart are made in China. And I’m going to throw one out there: there will come a day when WalMart will sell Chinese cars as well.
04/19, 1:05 AM
posted by:
AMGoff
“At this point… if there was a motorcycle with a roof that I could ride year round in the rain and snow… I’d buy it.”
There is more or less… it’s called the “Carver One” and it’s built by those zany Dutch… it’s actually a pretty wicked machine. I don’t think they’re on sale in the US yet, but I’m sure you could pay to import one.
Anyway… a Honda Fit, you’ve got to be joking?? What’s the point? It gets what, 27/34mpg… and it will end up costing your life as well because you’ll end up driving off the road after falling asleep from overwhelming boredom. If you’re actually serious about getting something that sips fuel, why not get a late-model VW TDI… they’ll give you 31/40mpg and you might just have a little fun driving it as well. Hell… even a Mini Cooper 28/37 AND they ARE fun to drive… but a Honda Fit?
Please…
04/19, 4:20 PM
posted by:
sharpie
You know LLN, you make it sound like most Chinese drive huge full size trucks. In fact, most don’t! In the city, there are still a lot of bicycle riders. In rural area, motorcycle is the norm. If I saw any car at all, they are generally the VW Jetta class and some Toyota Vitz (Yaris as we know it on this side of the ocean). Those aren’t exactly huge cars, at least no where near the amount of full size trucks and SUVs in the U.S.
04/20, 1:13 PM
posted by:
autonut
Veda, Surprisingly enough their roads are terrific and last year were practically empty outside of metropolises. Apparently commies are readying infrastructure for half a billion cars. Cities are congested, but they do have well developed rings around them. I even think that commies figured out that most of citizenry will never drive well due to peripheral blindness and build extra capacity on top of it.
Johnny, I could not find ANY bicycles not made in China even in the bike shops. Schwinns and Rosses are made their for long time and even performance bikes. Of course for 10K you can get Italian or German bike, but I am not racer. That $sum$ will buy books for my kids for one semester
.
04/20, 9:42 PM
posted by:
Diel
I’ve got one acronym to say about this, WVO.
In other news, if your heading to the Fabulous Fords Forever show at Knott’s go toward the Sears parking lot near there to see a production Dodge Challenger SRT8 in silver with Michigan manufactures plates. Don’t know if its still there but it was when I left at around 1. I’m putting some pictures up on flickr if anyone wants to see em.
04/20, 10:37 PM
posted by:
kool_aje
Why should you hate Chinese? It’s plain logic. Some people are just stuck on KKK mind-set. Shame on you.