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TOYOTA
China Automakers Battle Sales Slide
SHANGHAI, China - The battleground for car buyers in China is beginning to shift from major population centers to smaller cities, as local brands struggle to maintain sales volume and growth amid weakening market demand.
Among the major multinational brands, Toyota passed General Motors in China sales for the first nine months of 2008 and moved into 2nd place, behind Volkswagen.
Local companies such as Brilliance China and Tianjin FAW Xiali have been extending their distribution networks to second- and third-tier cities after sales growth in cosmopolitan hubs such as Shanghai and Beijing slowed.
Tianjin FAW, which makes the Vizi subcompact, plans an eightfold increase in number of dealerships to 800 by 2010, according to spokesman Dang Ren. The move aims to help the company achieve its aggressive sales target of 400,000 units during the same period.
Another domestic player, Brilliance Jinbei Automotive, wants to double the number of dealers in second-tier cities to 400 by 2010, a company official said.
Major Chinese carmakers, including Chery Automobile, Geely Automotive Holdings and Great Wall Motor, all reported drops in sales and profits this year, as the slump in stock markets and the global financial downturn drove Chinese consumers away from auto purchases.
'Chinese brands are impacted the most under the global financial crisis because the buyers of domestic brands are cost-sensitive consumers,' said Yale Zhang, analyst from CSM Asia Corp. 'Domestic brands will have a difficult time in 2009.'
Chinese automakers also found it hard to compete with joint ventures as more small, low-priced vehicles carrying foreign brands were launched in the Chinese market.
In September, China's passenger car sales dropped 1.4 percent from a year earlier to 552,800 units. It was the second month in a row of year-on-year sales declines.
China car sales rose 11 percent in the first nine months to 5.1 million. Volkswagen, the largest foreign maker in China, boosted sales 11 percent to 753,450 at its two joint ventures, according to the China Association of Automobile Manufacturers.
Toyota's joint ventures reported nine-month sales increased 30 percent to 407,427, while GM's joint ventures sold 373,945, about even with a year earlier. If sales of minivehicles are added, GM's total for the nine months rose to 785,144, according to Bloomberg.
Among the major multinational brands, Toyota passed General Motors in China sales for the first nine months of 2008 and moved into 2nd place, behind Volkswagen.
Local companies such as Brilliance China and Tianjin FAW Xiali have been extending their distribution networks to second- and third-tier cities after sales growth in cosmopolitan hubs such as Shanghai and Beijing slowed.
Tianjin FAW, which makes the Vizi subcompact, plans an eightfold increase in number of dealerships to 800 by 2010, according to spokesman Dang Ren. The move aims to help the company achieve its aggressive sales target of 400,000 units during the same period.
Another domestic player, Brilliance Jinbei Automotive, wants to double the number of dealers in second-tier cities to 400 by 2010, a company official said.
Major Chinese carmakers, including Chery Automobile, Geely Automotive Holdings and Great Wall Motor, all reported drops in sales and profits this year, as the slump in stock markets and the global financial downturn drove Chinese consumers away from auto purchases.
'Chinese brands are impacted the most under the global financial crisis because the buyers of domestic brands are cost-sensitive consumers,' said Yale Zhang, analyst from CSM Asia Corp. 'Domestic brands will have a difficult time in 2009.'
Chinese automakers also found it hard to compete with joint ventures as more small, low-priced vehicles carrying foreign brands were launched in the Chinese market.
In September, China's passenger car sales dropped 1.4 percent from a year earlier to 552,800 units. It was the second month in a row of year-on-year sales declines.
China car sales rose 11 percent in the first nine months to 5.1 million. Volkswagen, the largest foreign maker in China, boosted sales 11 percent to 753,450 at its two joint ventures, according to the China Association of Automobile Manufacturers.
Toyota's joint ventures reported nine-month sales increased 30 percent to 407,427, while GM's joint ventures sold 373,945, about even with a year earlier. If sales of minivehicles are added, GM's total for the nine months rose to 785,144, according to Bloomberg.
