"Automotive inSIGHTS 2/2010" (PDF, 3784 KB - Roland Berger

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8 A LOOK AROUND THE WORLD What, then, is the right product for Chinese consumers? They are described as "rational and practical". Each consumer makes decisions about what to buy based on what is really necessary and what is not, given that they can presumably not purchase everything they want. As a result, a wider variety of EVs might be accepted in China compared to Japan. Consumers in large cities such as Shanghai are likely to value status, thus models with relatively high specs launched by state-owned, foreign and joint venture OEMs might garner a large part of the market. Such models would rank close to ICE vehicles, for example with a driving range of more than 150 km and electronic control to counter mechanical failure or driver error. Though the price range of EUR 20,000 to 30,000 is high for the normal income level, Chinese consumers tend to be practical about price. On the other hand, consumers in the suburbs do not have all that much purchasing power. EV popularization would be mainly low-spec EVs, offered by private OEMs or venture businesses. However, these will not differ dramatically from EVs offered by foreign or JV OEMs, since they will also use Li-ion batteries and electronic control units. But the price of these cars will be the major difference since they don't have enough of a brand premium. As for rural cities, EVs with completely different sizes or driving performance, such as 2- or 3-wheeled EVs, would be the main market driver. These will be offered by local SMEs to the tune of thousands of euros, and will provide mobility essential to daily life. However, the battery is likely to be acid-lead or Ni-MH and the driving range would be just tens of kilometers. The government is also pushing EV development, and a plan to invest EUR 12 billion over the next 10 years in EV/PHEV and infrastructure development was recently announced. Of that, EUR 5 billion will be invested in EVs and their key components over the next 5 years. Funded by these government programs, EV launches by local OEMs are likely to accelerate. New JVs are also entering the market, joining existing OEMs (government, foreign, JV, private). Competition is becoming more severe, not only through increases in the number of vehicles, but also quality improvement. We are also seeing initiatives such as SAIC Group and SAIC Motor co-investing in an independent NEV company (Jieneng) and building a huge R&D center (Fig. 4). Another example is BYD's joint venture with Daimler for development. In this respect, the key success factor is speed.
A LOOK AROUND THE WORLD The greatest risk is to fall behind in this EV development race, and it is a mistake to take too much time trying to attain perfection. Fortunately, trouble after the launch tends not to matter so much if it is handled quickly, at least in China. BYD frequently faced major problems after launching its product, such as breakdowns on the road, but after a year of continuous improvement, the frequency of such incidences seems to have dropped dramatically. Such problems after launch are usually not fatal in China, as Chinese consumers tend to be practical-minded, finding that "these things just happen with a new model", or "it can be fixed if it's broken". These consumer characteristics need to be incorporated into any successful market approach. In short, Japan's exacting consumers require well-developed products, and China's practical-minded consumers require quick product launch. There is no right or wrong here; rather, it is important to recognize these market characteristics in order to seize business opportunities in this growing market. Jun Shen Partner, Roland Berger Strategy Consultants, Shanghai jun_shen@cn.rolandberger.com Satoshi Nagashima Partner, Roland Berger Strategy Consultants, Tokyo satoshi_nagashima@jp.rolandberger.com Junyi Zhang Project Manager, Roland Berger Strategy Consultants, Shanghai junyi_zhang@cn.rolandberger.com Hitoshi Kaise Project Manager, Roland Berger Strategy Consultants, Tokyo hitoshi_kaise@jp.rolandberger.com 9
Page 1 and 2: AUTOMOTIVE Automotive Competence Ce
Page 3 and 4: A LOOK AROUND THE WORLD Automotive
Page 5 and 6: A LOOK AROUND THE WORLD Although ma
Page 7: A LOOK AROUND THE WORLD What then w
Page 11 and 12: MOBILITy CONCEpTS clearly sees itse
Page 13 and 14: MOBILITy CONCEpTS > Available: A ve
Page 15 and 16: AUTOMOTIVE 2025 Regional trade bloc
Page 17 and 18: AUTOMOTIVE 2025 Trends in the emerg
Page 19 and 20: BOOKS & STUDIES VISTA - New growth
Page 21 and 22: pOWERTRAINS AND FUELS OF THE FUTURE
Page 23 and 24: pOWERTRAINS AND FUELS OF THE FUTURE
Page 25 and 26: INTERVIEW - ERICH SIXT Nevertheless
Page 27 and 28: BENELUX René Seyger Phone +31 (20)

"Automotive inSIGHTS 2/2010" (PDF, 3784 KB - Roland Berger

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