Chinese homegrown brands lose market share to each other

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Data from China Association of Automobile Manufacturers (CAAM) shows that the August sales of homegrown passenger vehicles declined 2.86% from a year earlier to 407,400 units, accounting for 37.2% of the country’s total sales of passenger vehicles, down 3.96% from a year earlier.

Most of China’s homegrown brands saw their market shares down in August except Geely and Great Wall. BYD’s auto sales declined 8.4% in the month, Chery’s auto sales down 15.9%, and SAIC’s sales of passenger vehicles down 1.4% in the Jan-Aug period. The expiration of the stimulus policies early this year could be a reason for the homegrown brands to lose market shares.

Some analysts blame foreign joint venture manufacturers that are grabbing the market shares of domestic brands. It’s true that the JV automakers saw their market shares up this year, and some JV automakers entered into the lower-price vehicle segment, the traditional stronghold of homegrown brands.

However, it’s a wrong attitude to blame the market share decline to the aggressive moves of the JV automakers. Actually, it’s themselves they are losing to. The young homegrown brands don’t have distinct brand characteristics, so their image as a whole might be hurt by some irresponsible brands. Besides, the soaring sales made China’s homegrown brands lose their ration. Shen Yang, general manager of SAIC-GM-Wuling, believes that China’s auto market growth was overly fast in recent years, which made the homegrown brands lose the motive to get themselves improved. They stop respecting the market, nor trying to learn about the market. Now the bad market situation is forcing the homegrown brands to think it over and acquire more learning abilities.