November 11th Newsletter 15
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Hi {name}, how are you doing? China Car Times has been online for five years later this month. It’s hard to believe that the website snowballed from being about the launch of the Roewe 750 in 2006 on my own personal blog in to its own independent entity that eventually became one of (if not the) leading automotive portals for the Chinese Car industry, a claim that can be backed up with our ever increasing page view figures. Oddly enough, China Car Times Birthday rolls around on 11th November, which is Single’s Day and is probably the main reason why I had enough time on Nov 11th 2006 to create the site in the first place. Onwards and upwards! This week has been an interesting one for the Chinese car industry, firstly Saab became the latest SINO company (Swedish In Name Only) after Pangda and Youngman teamed up to buy the car company from Victor Muller after they become considerably tired of the on-going drama. Saab was sold to Spyker Cars (now Swedish Automobile) for some 400 million USD in January 2011 but now the company is now nearly under Chinese ownership for a mere 100 million USD. There are still some hurdles to cross, the Chinese government needs to okay the deal to make sure funds are not being wasted, the National Development and Reform Commission (NDRC) Director has already agreed to the deal verbally ‘on principle’ but is patiently waiting for a solid business plan to be put forward by the two companies. Another wildcard in the pack is of course GM, GM still has preference shares in Saab and still supplies the company with technology, specifically engines and platforms. As Pangda-Youngman want to make Saab’s in China to offset European and American losses GM’s partners in China are not going to be pleased by the introduction of yet more GM platforms into China – we are thinking of Shanghai Auto Industry Corp that produces the Buick and Chevrolet range of vehicles in China and also Beijing Auto Industry Corp that bought the rights to the older 9-3 and 9-5 from Saab for nearly 200 million USD in 2010. Neither manufacturer are likely to be happy with a third company entering the already tightly packed Chinese market with similar products. Infiniti also announced this week that they would move their global HQ to Hong Kong and see their cars produced in China in the next year. Japanese luxury brands such as Infiniti, Lexus and Acura have not taken off in China with the same gusto as they have in the USA, Chinese consumers seem to prefer the traditional old world luxury labels from Jaguar, BMW, Mercedes and Audi. Infiniti are likely to put the EX SUV and G-series sedans into production in China according to Chinese media reports. The luxury market in China is still wide open, 2010 luxury brand sales were as follows:
Clearly Infiniti were not the worst off, but they do have considerable room to grow. The Germans, and to a lesser extent Lexus, have managed to hit the executive segment of the market first and exploit that area before moving in with their lifestyle products such as SUV’s and sports models. The Japnese luxury brands have done the opposite with a focus on lifestyle products and shown a neglect for the executive use market. By opening the executive market first German manufacturers have been able to grow their brands rapidly by having models on the roads, Japanese luxury brands should learn from their growth, and also localization methods, if they are to make the most of the potential in the Chinese market.
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