Passenger Vehicle Manufacturers Face Great Challenges

Aug. 2, 2010 - PRLog -- WWW.SHCRI.COM - According to research by China Research and Intellignece, the production of passenger vehicle in China reached 6.68 million in 2010H1 and the sales volume was approximately 6.72 million, rising by 51.20% YOY and 48.20% YOY separately.
The thriving passenger vehicle market catches the attention of commercial vehicle companies. In July 2010, SGMW launched its new passenger vehicle brand. It is reported that Jiangling Motors will also advance into the passenger vehicle market. Jiangling Motors plans to launch its first SUV of independent brand recently. It is an undisputable fact that commercial vehicle manufacturers are advancing into Chinese passenger vehicle market.
Moreover, the great difference between production and sales volume of passenger vehicle indicates the severe oversupply in Chinese passenger vehicle market. In 2009, China became the largest auto production and sales country in the world. The production and sales volume of passenger vehicles reached 10.38 million and 10.33 million separately. There was even short supply in the auto market. This situation remained till January 2010. Given the prosperous sales, auto manufacturers lifted up their sales objectives in 2010 successively with the growth rates of 10%~20%. However, after the Spring Festival, the auto sales slumped. Auto enterprises’ production expansion leads to a large quantity of auto storage.
July and August is traditionally the offseason for auto sales. Many manufacturers will adjust the production capacity during this period. This will relieve the high inventory pressure to some extent. Nonetheless, some manufacturers have declared not to reduce the production since the sales in the latter half of the year are usually better than that in the first half. Thus, the pressure of excessive inventory will remain high.    
Usually, manufacturers will launch new models with high prices in July and August to recover the input for low-price automobiles sold in May and June. However, pressured by the high inventory, auto manufacturers adopt the direct price reduction strategy in 2010. The significant reduction in prices of some brands will usually generate a price war among more auto brands. It is forecast that the price war in Chinese auto market will break out in August.
All these challenges pose great pressure on distributors and manufacturers of passenger vehicles. Distributors plan to negotiate with manufacturers to guarantee their operation profit, while manufacturers are seeking appropriate terminal marketing strategies to get out of the sales plight.  
The Research Report on Chinese Passenger Vehicle Market, 2009-2010 is for reference of the status quo and development trend of the passenger vehicle industry in China.
This report mainly focuses on:
-Production status of Chinese passenger vehicle industry
-Sales status of Chinese passenger vehicle industry
-Development of sub-industries of Chinese passenger vehicle industry
-Import and Export of Chinese passenger vehicle industry
-Main enterprises and competition status of Chinese passenger vehicle industry
-Influence of the global financial crisis on Chinese passenger vehicle industry
-Merger and reorganization of Chinese passenger vehicle industry
-Predictions on the development trends of Chinese passenger vehicle industry
For more details please refer to http://www.shcri.com/reportdetail.asp?id=347

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The primary and secondary research was conducted by consultants in China who know the industry and the local markets well.