PERSPECTIVES ON THE EVOLUTION OF THE AUTOMOBILE ...

Automotive Industry in China
III Micro analysis
1. Overview of Automotive Industry in China and
future perspectives
Car manufacturers in China can be divided into three groups: The Big 3, Joint
Ventures and New players.
The Big 3 are the three largest Chinese companies with a long history. They are SAIC,
FAW and DFM.
These 3 companies, if we take into account their Joint Ventures, have around 50% of
market share in China. FAW and DFM are supported by the central government while
SAIC is supported by the local government of Shanghai. These companies are mainly
focused on the domestic market. They have a good dealer network and their main
objective is to develop high/medium-end cars.
SAIC is exporting finished cars to Mongolia, Russia, the Middle East and South
America. To Africa, west Asia, middle Asia and south Asia, they export the spare
parts and they assemble the car in those countries. SAIC has 19 branches and offices
in America, Japan, Germany, Thailand, etc.
In the interview undertook in SAIC they said not to be interested in the U.S. or
European market yet. The reason is that they are not prepared and the effort needed is
not worthy.
DFM is exporting a small quantity: about 7,000 units in 2007 and 12,000 units in
2008. DFM is in process of developing their first own brand car.
FAW exports a quite big quantity of its own brands cars: 10, 336 units in 2004; 14,
256 units in 2005 and 10, 023 units in the first 9 months of 2008.
The Joint Ventures are between Multi National Companies (MNCs) and Chinese
companies. The MNCs want to win market share in the Chinese market, but the
policies in China ask them to be in Joint Ventures with china local companies to have
the right to assemble cars in China. They focus on the high/medium-end cars.
They are GM-SAIC, VW-SAIC, VW-FAW, Toyota-FAW, Peugeot/Citroen-DFM,
Nissan-DFM, Kia-DFM, etc.
They are in China for the domestic market. However, except Peugeot/Citroen-DFM,
the left 6 export small quantities abroad
The New players are younger and independent companies. Except Chery, most of the
others are not state-owned and were started by Chinese entrepreneurs. In general, they
have poor brand image. In the interviews undertook, some people stated that in
general the New Players produce low quality products, and also lack experience of
this industry. Eventhough, most of the New Players state that exporting cars to
foreign countries is one of their short term goals. They are Chery, Geely, Great Wall,
BYD, etc.
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