2nd-, 3rd-tier cities to lead Chinese car market in 2010

In 2010 the Chinese car industry is expected to be lead by second and third tier cities in the countries interior. Until 2009, the local car industry was largely lead by the relatively developed East coast first tier cities such as Shanghai, Shenzhen, and Guangzhou.

However, this trend is likely to change in 2010 with the cars to the countryside program set to continue into 2010, and also a more settled economy than 2009.

Second- and third- tier cities is where Chinese automotive manufacturers are likely to see their biggest gains, inland residents are not so choosy about branding, they care mostly about price, which is a factor that all of the Chinese automakers can compete on.

In recent years GM have been lowering the price of some of their budget models in anticipation of large rural growth. Other large multinationals in China have yet to release a smaller cheaper vehicle which will appeal to rural buyers, and in this respect GM does remain to be a rarity among the big foreign players in China.

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