Multinational car makers optimistic about China

"China has become the world's second largest auto market as well as Toyota's second largest overseas market. This is the reason we've chosen to launch our new Corolla in Beijing," said Yoshimi Inaba, Vice President of Toyota Motor Sales at the launch of the tenth model of the Toyota Corolla on November 16. He added, "We would like to send a message at this point: Toyota attaches great importance to China's market and hopes that Chinese consumers are conscious of our enthusiasm and sincerity."

Yoshimi Inaba's speech reflected the sentiments of nearly all the multinational car makers. Toyota aims to have a 10% share in the Chinese auto market by 2010, which means that it needs to sell more than one million cars in four years.

Mazda has a similar ambition and equal confidence in the Chinese market. Kiyoshi Ozaki, Director and Senior Executive Officer of Mazda said that Mazda's mid-term goal is to produce and sell 300,000 cars in China by 2010. To this end, Mazda will cooperate with FAW and Chang'an-Ford in production and sales. According to Kiyoshi Ozaki, Chang'an Ford Mazda's second factory in Nanjing will be able to produce 160,000 vehicles when it is operational. It is currently at the stage of equipment installation and testing. Mazda has also started building another factory in Nanjing with a production capacity of 350,000 vehicles. Both factories will be put into production in 2007. In terms of car models, Mazda will introduce five new models to China. Moreover, Mazda will enlarge its sales network to improve customer satisfaction.

In the first 10 months of this year, GM China Group sold 714,000 cars in China, an increase of 37 percent from the same period of last year. This is a very gratifying record. Kevin Wale, President and Managing Director of GM China Group said, "Although China has not been the only highlight of GM's year and its growth rate is lower than that of the emerging market of Mexico, the Chinese market will continue to grow rapidly in the next 10 to15 years. The Chinese market is absolutely essential to GM's future." The United States was the center of the automobile industry in the 20th century and in the 21st century but now China has the attention of the world, added Mr. Wale.

New cars versus local vehicles

FAW introduced its Skoda model-- Skoda Octavia -- to China at the show and this has been very popular. Detlef Wittig, CEO of Skoda Auto prefaced the vehicle by saying that Octavia has been well received in Europe and won a number of awards. In Germany, Octavia was the biggest selling imported vehicle. Different from popular brands, Skoda models are usually more spacious and have more functions. This is because in the Czech Republic (where the company is from), a country that is not especially wealthy, people expect more for the price of their car and this expectation is increasing elsewhere. Detlef Wittig added that the new Octavia, produced by Shanghai Volkswagen, has had alterations made to meet the demands of Chinese consumers.

With the Chinese auto market maturing, differences in consumer demand are emerging. Multinational auto makers are conscious of the high demand for vehicles in China. Although the time is not yet ripe for them to develop special models for the Chinese market, there is a growing trend towards localizing auto products in accordance with Chinese demands.

Premier brands itching to have a try

A day before the opening of the Beijing Auto Show, approximately 400 people from 35 countries arrived in Beijing driving the new Mercedes E-class sedans. It had taken them 15 days to cross 9 countries on a 14,000 kilometer journey. The same night, the brand new Mercedes E-class was formally launched at the Beijing Benz-DaimlerChrysler factory. Benz-DaimlerChrysler Chairman Dieter Zetsche said that the Mercedes E-Class Experience Paris-Beijing 2006 was the longest and biggest road show in the history of Mercedes Benz. "In a very short time, China has rapidly become one of the world's most important automobile markets. During this period of rapid growth, Benz-DaimlerChrysler has established a very solid foundation, which will ensure us long-term success and enormous profits in China."

The Volvo S40 has been a bestseller since being launched in September. Volvo expects to sell 4,000 S40s in the next four months. During the ongoing Beijing Auto Show, President and CEO of Volvo Cars Fredrik Arp introduced two of the company's latest models to China, the C70 and the C30, which demonstrates Volvo's confidence in China's development. "Of the approximately 3.8 million cars sold every year in China, luxury cars account for only 4 percent. I believe that as China develops economically, the luxury and premier car market will grow rapidly. In the next 5 to 10 years, the growth rate of the luxury car market will be higher than that of the standard car."

Arp told reporters that Volvo is "pursuing the idea of a balanced growth, according to which it is necessary to achieve a balance between imported products, domestic cars and sales distribution networks". Volvo Cars' general manager in China, Per Norinder, explained that Volvo is developing a series of projects and programs to improve customer satisfaction and service satisfaction, which will help double sales in the near future.

By People's Daily Online