“The consumer automotive industry in China is unlike any other. We are dealing with a country of first time car owners who have no benchmark or history upon which to frame their preferences,”
The Chinese automotive market is expected to grow at an annual rate of 10% in the next decade thanks to its growing middle class. The Chinese government aims to have 500,000 to 1 million green cars (including electric and hybrid cars and buses) on the road by 2015, and that appears to be a conservative estimate.
Based on Solidiance’s forecast, there could be between 2 to 4 million green cars on the roads in China by 2020, given a 5-10 % penetration rate of the Chinese Electric vehicle market.
The Chinese government will apply subsidies to overcome key adoption barriers such as the cost premium of green cars and inconvenience of charging the batteries that power these vehicles. Nationwide, the purchase of battery cars and plug-in hybrids will be directly subsidized, with significantly higher subsidies for urban consumers. In addition, the construction of charging stations and battery recovery networks will be subsidized by the Chinese government.
The Chinese government has also pledged to finance infrastructure and research into electric vehicles technology. Foreign automotive manufacturers are forming joint ventures with domestic automotive players in a bid to enter the market early.
“Thanks to its formidable adaptability, China will be the undeniable leader in electric vehicle production and consumption 10 years from now. On one hand, China has no choice because it has little oil so the government will push the right buttons; on the other, it does not have the weight and the immobility of an ancient domestic car industry.” says Damien Duhamel, the Managing Partner of Solidiance.
The report can be accessed under Fresh Ideas at www.solidiance.com
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Solidiance is Asia’s premier B2B marketing strategy firm.. Headquartered in Singapore with offices in China, India, Indonesia, Thailand and Vietnam, Solidiance helps multi-national companies grow in Asia.