Chinese Cars To Take The Driving Seat in China

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Xi Jin Ping is the new boss in China and he’s grappling with corruption. Fighting corruption appears to be Xi’s main goal at the moment with many a official being sent off to prison for his misgivings, Xi has also ordered the military and government organs to cut back on the big dinners and booze spending and to remember the Party’s roots to represent the people. The previous Chairman Hu told departments to cut back on car spending and buy more Chinese branded cars – last month the Shenzhen party boss took the keys to his brand new BYD E6 electric car and cast his Audi A6 aside.

Cui Dong Shu from the China Passenger Car Assosiation believes that governmental departments should do more to buy Chinese cars to promote the growth of the industry. Via China Daily:

Cui Dongshu, the deputy secretary-general of the China Passenger Car Association, said that the government’s previous appeal for the use of domestic brands had “fallen on stony ground”.

However, he said its latest urging of austerity should “definitely provide a big step forward” for locally made cars.

“Domestic brands should grab that opportunity, in a market long-dominated by foreign rivals,” he added.

Authorities in Gansu province have already become the first to ask all its offices to buy domestic brands if they need new cars.

Its move was followed by counterparts in the Ningxia Hui autonomous region, the Xinjiang Uygur autonomous region, Hunan province and Shanghai.

Wang Rong, the Party chief of Shenzhen in Guangdong province, recently replaced his official Audi A6 with an electric car produced locally by BYD Auto Co Ltd.

Officials at the provincial government in Guangdong province have also been assigned cars produced by Guangzhou Auto Trumpchi, for the local people’s congress.

“Using homegrown branded vehicles as official cars will set a good example and influence more individual users to buy local cars,” said Cui.

“The move by local and central government officials will hopefully set off a public trend for less-expensive domestic vehicle brands.

“In the past in China, it has been a sign of prestige to own a foreign car, and officials have followed that trend to demonstrate the difference between them and ordinary people. But that could be set to change,” he added.

Government procurement accounts for less than 2 percent of the Chinese car market, but “the trend followed by individuals is harder to predict”, said Cui.

Statistics show that almost 90 percent of vehicles bought by the government up until 2010 were foreign brands.

But the government’s support for domestic brands decreased that to 80 percent by the middle of 2011.

Will Chinese officials throw down their Audis and take up the likes of Emgrand, Riich and BYD? Not so fast we think. Higher level leaders like their Audi A6′s, mid level leaders like their base Passat’s and low level minions are loving their Santana’s and Jetta’s. Parts and servicing networks for these models are widespread and are cost effective and they share many a similar part. Maintaining a mixed fleet of Besturn, BYD’s, Geely, Riich and Emgrand models will be a painful PR exercise.

Do Audi have anything to fear in the long term? If government users shy away from the likes of the A4L and A6L they still have the legions of business owners for whom Audi has become a standard. Audi needs to gain more consumers who are lifestyle and brand focused, hence the introduction of models such as the A3 to their new Foshan factory.

About the author  ⁄ Ash

Ash came to China at 18 and never looked back, a decade later he is still here. After a 4 year stint in a Chinese University where he gained a double BA in Chinese and International Trade he worked for a myriad of different companies in the Chinese Auto industry before heading back to school to get an MBA with a focus in marketing.

One Comment

  • dragin
    February 5, 2013

    Back in November 2011 didn’t we read of new legislation limiting the cost of official cars to 180,000RMB and engine size to 1.8 liter? Yet I can’t say I saw any subsequent reports of an impact on the sale of Audi and the other official favorites. Perhaps President Hu never got it done for any but the petty officials?

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