China is now the world's 2nd largest vehicle market.

[Mr. M]

China surging in car market


Sales of 7.2 million units move country past Japan to make it the No. 2 vehicle market after the United States.

Joe McDonald / Associated Press
http://www.detnews.com/apps/pbcs.dll/article?AID=2007701120370

BEIJING -- China surged past Japan to become the world's No. 2 vehicle market after the United States last year as car purchases by newly affluent drivers jumped 37 percent, the Chinese auto industry association said Thursday.

The announcement highlighted China's lightning evolution from a "bicycle kingdom" into a major auto market where foreign producers are racing to open factories and target a growing urban middle class.

Struggling U.S. automakers General Motors and Ford have gotten a boost from double-digit sales growth in China and fledgling Chinese manufacturers are starting to export their own cars, trucks and SUVs.

"There's money here and people spend that money on cars," said Michael J. Dunne, vice president for Asia-Pacific for auto research firm J.D. Power and Associates.

China's overall vehicle sales, including trucks and buses, rose 25.1 percent to 7.2 million units last year, China Association of Automobile Manufacturers said. Passenger car sales rose to 3.8 million, it said.

Japan's total vehicle sales last year came to 5.7 million units, a slight decline from 2005, said the Japan Automobile Manufacturers Association. U.S. car and truck sales totaled 16.5 million units last year, down a bit from 2005, according to Autodata Inc.

China could overtake the United States as the top car market some time after 2015, Dunne said.

Red-hot Chinese sales have brought relief to U.S. automakers, which have seen weak demand at home.

General Motors Corp.'s total sales in China last year rose 32 percent over 2005 to 876,747 vehicles. Ford Motor Co.'s sales of Ford, Lincoln, Jaguar, Land Rover and Volvo, rose 87 percent to 166,722 units.

 

[JRB11784]

That's interesting...quality v. quantity.

 

[Yperion]

And who is the No1 luxury car maker in China?

 

[JRB11784]

Would that be Audi? I remember that Audi made an A6 just for china....Was that a long-wheel base?

 

[Yperion]

Correct. Audi sold 81708 units in China last year:

http://www.atimes.com/atimes/China_Business/IA13Cb01.html

Audi makes locally the A6L and the A4. The other models are imported.

 

[EnI]

Audi has got quite a long tradition in China (manufacturing there since 1988), and has earned a position of top luxury brand. Producing A6 (LWB) & A4 there. Annual Audi production capacity in China is

In 2006 Audi sold 80,808 (+39%) cars in China (w/o Hong Kong). A6 LWB is a huge hit there - also being a semi-official protocol vehicle (chauffeur driven) of many state & local officials. Also Audi dealer network & marketing activities are much better developed than the ones of respected competitors. More about Audi history in China: HERE

BMW (BMW brand only!) sold 35,300 (+49.6%) cars in the same time (w/o Hong Kong & Taiwan). BMW produce 3er & 5er (new LWB version sales & production just started) in China. Annual BMW production capacity in China is 30,000 units.

While MB sold 21,100 (+33%) MB badged cars in China (incl. Hong Kong!!!) last year. MB does not produce cars in China.

Having a production facilities in China helps a lot since locally produced vehicles (eg. A6 & 5er) have much lower prices than imported ones - due being free of heavy duties & taxes. Also Chinese market loves LWB versions of executive sedans. Audi was the first one to recognize such need, and has capitalized on that a lot. BMW & Cadillac have recently started to follow Audi formula: by offering locally produced 5er LWB, and SLS (= LWB version of STS).

 

[vabboud]

what's the deal about LWB executives, i mean what's so great about them, how do they affect balance and dynamics, what kind of extras in, price premium?

 

[EnI]

what's the deal about LWB executives, i mean what's so great about them, how do they affect balance and dynamics, what kind of extras in, price premium?

The problem is that full-luxury sedans (eg. S-class, A8, 7er etc) are way too expensive since they are imported (due the duty & tax is very high).

Locally produced executive sedans are a much better bargain. And since full-luxury is not quite available, yet the demand exists car makers such as Audi, BMW & Cadillac offer LWB versions of locally produced executive saloons - they are not too expansive, and offer almost all the luxury of full-luxury sedans. Some can say LWB executive sedans are "poor man's luxury".

 

[Imhotep Evil]

Interesting, Audi sales are similar to USA and UK levels, while for BMW and MB this is not the case.

 

[EnI]

Interesting, Audi sales are similar to USA and UK levels, while for BMW and MB this is not the case.

It is not a secret Audi is capitalizing on being an official supplier of Chinese communist regime. A large amount of Audis sold in China are fleet cars - used for regime officials.

Mind that Audi started to produce cars in China way back in 1988, and used this advantage to became regime's official supplier - since in 1988 there were absolutely no enough rich individual people to buy luxury cars such as Audi. So a deal with a regime was a logical move. And it paid off very much.

But IMO it is very dangerous for Audi (in the long run) to be stuck with an image of regime's official car / brand.

I hope klier can give some insights on this issue.

 

[Choleric]

Again this is ridiculous Eni, Im sorry but, people still buy BMW, Mercedes and VW even though they supplied cars, motorcycles, and airplane engines to the Nazis not to mention they used slave labour via concentration camps to build such cars.

So bringing up the fact that Audi does supply cars to the GOVERNMENT just as most other car companies do in other countries, and saying that this is a bad thing for Audi, is just ridiculous, IMO of course.

 

[EnI]

Again this is ridiculous Eni, Im sorry but, people still buy BMW, Mercedes and VW even though they supplied cars, motorcycles, and airplane engines to the Nazis not to mention they used slave labour via concentration camps to build such cars.

So bringing up the fact that Audi does supply cars to the GOVERNMENT just as most other car companies do in other countries, and saying that this is a bad thing for Audi, is just ridiculous, IMO of course.

I'm entitled to express the opinion just like you are.

I'm not saying Audi is doing anything wrong - yet they just used the opportunity they competitors (eg. BMW, MB, Lexus) can not anymore. But IMO being so closely tied with a regime can bounce back some day. But I can be wrong. Eg. many years MB was almost official Taxi car in Germany - flooding German streets with beige MB taxies, yet that didn't hurt MB's image. Yet poor reliability & drop in quality did.

 

[Choleric]

I'm entitled to express the opinion just like you are.

Yes you are, Im sorry I think it just hit a nerve.

agree to disagree.

 

[phaeton]

VWAG also have invested lots of money in assistance to some of the marques Chery, SAIC and FAW ring a bell also VWAG donate to charities over there.

So VWAG and China have a long successful relationship to prove that no ones copied their vehicles.
One did, but VW sued them & won < that proves VW & Audi has a great relationship.

Lets see GM or Toyota do that