Auto Sales in China


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China has a population of just over one billion persons. As the country had started to do so in the late 1970s and early 1980s, opening up their economy to western companies, the value China has become to the rest of the global economy is almost immeasurable. With new technologies and more fuel efficient vehicles being produced on a larger scale, the new market in China offers car manufacturers a new market and endless possibilities in factoring new profit in meeting new demands. Auto sales in China, by foreign auto makers has only recently become a solid and viable option, as the youthful generation, and the affluent alike search for global icons, especially American car companies, in the automobile industry, not the home based companies that have ruled China in the last few decades.

Auto SalesWhy China?

China is home to roughly 1.3 billion people, with a geography nationally, that is very demanding. While we tend to think of China as huge land mass, the eastern coast of China is much more modernized than the interior. The Eastern Coast, heavily populated demands more fuel efficient cars, smaller, and more compact, while the interior which composes much more of a farming and ranching population, needs work trucks more than smaller cars. While there are domestic car manufacturers, the demands they are meeting are slim. Almost simply put; the production capability of Ford and GM, Volkswagen, and other foreign to China, car companies have the abilities and funding to meet the demands that have been growing in China over the last few decades. Japanese and Korean car companies already have a foothold in the Chinese market, being domestic and cheap enough to be easily attained, yet the American car companies have been doing just as well on their own, primarily on the used car market. While used cars are selling stateside with a premium, the manufacturers themselves, almost double their profits by shipping used cars overseas to meet the demands, of a hungry market, often unwilling to pay for new car prices. So China has become what was previously an untouchable market, offering a strong and stable platform for present and future sales.

Why American Car Companies have a shotAuto sales 1

Unlike the Japanese or the German car companies that have been selling in China for the last few decades, the American car companies have only very recently broken into the Chinese market. Just like anything sold here stateside, something that is new, often is hard to keep in stock. The same principle is often duplicated where ever there is a new product open to the general population. Ford alone last year, saw a 30 percent increase in sales over its other American competitors, just in China alone. Ford, rather than GM or Chrysler, currently stands to gain the most in China, simply for two main and constant reasons. The first being the overall management and forward thinking at the upper management level that has guided and continued to bring Ford overall success in any market, while we have seen the global economy slow depending on regional economic standings. Ford has pulled through these issues, standing out among its counterparts, drawing a clear line of success between them, and their competition. Here in the U.S. when the federal government had to bail out the auto industry, Ford was the only American company to turn down the federal money, and instead used its own capital to restructure itself and redo the company’s interior self vision or projected goals and success. The second reason Ford has the best and better chance to succeed in China over its American counter parts lies more in the different lines offered for sale to the general population. While GM and Chrysler may offer various brands, there is more limitation of what is being produced and offered for sale, at reasonable price invoices. Whereas, Ford had been producing some of the strongest continual vehicle sales in North America for the last five decades, such a reputation is hard to kill even abroad. Along with their success with the F-150, Ford’s investment with the Focus and Fiesta has allowed for such versatility that the brand has been able to not only break into the Chinese market, but also create a demand all on its own and keep that demand afloat.

Auto sales in China offer auto manufacturers and western nations the same benefits, that of a new and strong market. Capitalistic nations, like companies rely on the ever new markets to become the guiding light when looking to secure new profits and not over exhaust the market that they are currently a part of. American car companies have the most to gain in China because of production capabilities as well as the new effect in a region that has been historically closed to the other nations of the world, and by opening a new market, the creation of jobs will also follow, when there is an increase in demand.

 

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