How to Break Out of the Circumvention of Chinese Automobile Enterprises with Market Occupancy Rate Dropping below 40percent Red Line

 How to Break Out of the Circumvention of Chinese Automobile Enterprises with Market Occupancy Rate Dropping below 40percent Red Line

There are 80 passenger car companies with stable sales statistics in China, including 22 foreign brands and 58 Chinese brands. Fifty-eight Chinese brand enterprises are clustered in 36% of the low-price market, and their survival situation is generally difficult.

Chinas car market has experienced 28 years of growth, and no one expected the first downturn to be so tragic. What is more alarming is that although Chinese authorities began issuing documents at the beginning of this year to stimulate automobile consumption, the extent of market decline is increasing, which shows that the depth of market decline has been difficult to reverse through external stimulus.

In my opinion, this years decline in Chinas auto market shows a very prominent consumer upgrading characteristics: young car buyers are disappearing, and the main age group of car market buyers is shifting to 30-40 years old. Older consumers have stronger purchasing power and higher quality requirements. Local automobile companies can survive and even win the market and develop against the trend only by improving the sales structure through technology and quality, entering the market segments with higher prices and more diversification, and getting rid of the fate of cheap cars.

Since February this year, sales of Geely, Changan, Baojun and other independent automobile companies have declined sharply. By contrast, the situation of the Great Wall is much better, with an increase of 5.5% in the first May of this year. Horizontal comparison is not difficult to find, the average bicycle price of Great Wall is the highest in the local automobile enterprises, reaching 94.2 million yuan; Geelys annual sales volume exceeds Great Wall, but the average bicycle price is only 79.5 million yuan.

The average bicycle price of Great Wall is the highest. The most important reason is the introduction of WEY brand and Harvard F series products. Since its establishment two years ago, WEY brands user base has exceeded 260,000, and is the highest market share independent brand in the price range of 150,000-200,000 yuan. The Harvard F Series is the new product series launched by Great Wall last year. The main models sell for 120,000-130,000 yuan. When the car market declined, Harvard F and WEY offset the decline in sales of Harvard H and together contributed a rare increment to Great Wall.

As for the reasons and Countermeasures for the decline of the automobile market, we can analyze and break through from many dimensions, such as users, prices, regional markets, product categories and so on. Of course, marketing is also one of the necessary means.

But the author believes that behind the industry shuffle caused by the downturn of the car market, in the final analysis, it is the cleaning of the weak by the strong. It is an irreversible fate not to forget the first thought that only by adhering to the strength of products, technology and quality can we survive and break through, and lack of investment in R&D, but also to eliminate the mediocre and even backward enterprises with mediocre technical and quality strength.

Source: First Financial Responsibility Editor: Guo Chenqi_NBJ9931