Why do japanese auto makers struggle in china
Though Japanese car manufacturers are planning to introduce variety of models in China market and go offensive, the competition here is tough as major automakers around the world also plan to do the same. The auto sales have been found to be touching to 18 million in year 2010 in China. This figure shows a 35 percent growth in sales than for the year 2009. Again a tremendous increase and explosive growth in sales is expected in future.
PROBLEMS OF JAPANESE CAR MARKET IN CHINA
Japanese car producers not only have failed to expand their sales market, a share has been noticed to get dwindled in China from 25.7 percent in the year 2008 to approximately 20 percent in 2010. The Japanese carmakers have number of disadvantages, the two major one are:
• Less models are available for Chinese market - Japanese offer a very little choice of car models to Chinese buyers, the example being forwarded by experts that Honda models available only with having engine capacity of 1600cc or less
• Higher prices than what their rivals are offering – Average Chinese buyer is willing to spend around 50,000 Yuan for his or her car. The Nissan sells its compact model March at about 80,000 Yuan as against USA's General Motors Co. selling its most popular model just for 30,000 to 50,000 Yuan.
As per the analysis report of Chinese Association of Automobile Manufactures, the cars having engine capacity not more than 1600cc and having a price tag of approximately 50,000 Yuan are most favorable for Chinese car buyers. Also as per government policy in China, a rural resident is entitled to subsidy for a compact car purchase and for those auto vehicles having the engine capacity of 1600cc or less.
Though the Japanese cars are supposed to be of high quality, they lack sense of luxury and are not considered to be fun or cool to drive. Some of Chinese car users think of them as less fashionable where as some others consider Japanese cars as something special but prices are unreliable and go beyond consumers buying capacity.
SOLUTION FOR JAPANESE CAR MARKET IN CHINA
As per Japanese Automobile Manufacturers Association Inc. the higher prices of Japanese cars are attributed to better performance than that of rivals and it creates bitter market struggle in China.
Japanese carmakers are going to address the problem and planning to introduce new models in the market to suit the test of local consumers. In December last, Guangqi Honda Automobile Co. has introduced a compact model known as Li Niam S1. This is the first new model supposed to hit the market in spring. Mr. Seiji Kuraishi, who is a chief operating officer of regional operation in China, has recently declared that Honda wants to be on offensive side by launching a car suitable for younger generation and for those who are first time buyers.
Out of certain exporters, Nexusscars is a Japanese Car exporter and online Used car brokers who supply cheap Cars from Japan Auctions. This also helps in increasing the exports of Japanese Used Cars.
However, no matter what efforts are put in, the observers of the market have the opinion that Japanese car suppliers will face uphill task to reclaim the lost market in China against their rivals as General Motors of USA and Peugeot of France have announced their plan to manufacture original brands in China.
PROBLEMS OF JAPANESE CAR MARKET IN CHINA
Japanese car producers not only have failed to expand their sales market, a share has been noticed to get dwindled in China from 25.7 percent in the year 2008 to approximately 20 percent in 2010. The Japanese carmakers have number of disadvantages, the two major one are:
• Less models are available for Chinese market - Japanese offer a very little choice of car models to Chinese buyers, the example being forwarded by experts that Honda models available only with having engine capacity of 1600cc or less
• Higher prices than what their rivals are offering – Average Chinese buyer is willing to spend around 50,000 Yuan for his or her car. The Nissan sells its compact model March at about 80,000 Yuan as against USA's General Motors Co. selling its most popular model just for 30,000 to 50,000 Yuan.
As per the analysis report of Chinese Association of Automobile Manufactures, the cars having engine capacity not more than 1600cc and having a price tag of approximately 50,000 Yuan are most favorable for Chinese car buyers. Also as per government policy in China, a rural resident is entitled to subsidy for a compact car purchase and for those auto vehicles having the engine capacity of 1600cc or less.
Though the Japanese cars are supposed to be of high quality, they lack sense of luxury and are not considered to be fun or cool to drive. Some of Chinese car users think of them as less fashionable where as some others consider Japanese cars as something special but prices are unreliable and go beyond consumers buying capacity.
SOLUTION FOR JAPANESE CAR MARKET IN CHINA
As per Japanese Automobile Manufacturers Association Inc. the higher prices of Japanese cars are attributed to better performance than that of rivals and it creates bitter market struggle in China.
Japanese carmakers are going to address the problem and planning to introduce new models in the market to suit the test of local consumers. In December last, Guangqi Honda Automobile Co. has introduced a compact model known as Li Niam S1. This is the first new model supposed to hit the market in spring. Mr. Seiji Kuraishi, who is a chief operating officer of regional operation in China, has recently declared that Honda wants to be on offensive side by launching a car suitable for younger generation and for those who are first time buyers.
Out of certain exporters, Nexusscars is a Japanese Car exporter and online Used car brokers who supply cheap Cars from Japan Auctions. This also helps in increasing the exports of Japanese Used Cars.
However, no matter what efforts are put in, the observers of the market have the opinion that Japanese car suppliers will face uphill task to reclaim the lost market in China against their rivals as General Motors of USA and Peugeot of France have announced their plan to manufacture original brands in China.
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