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New round of competition at Chinese auto market
Latest Updated by 2006-10-10 10:26:58
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In the first eight months of this year, China's auto sales reached a record high of 2.3688 million. Car sales of the top 10 auto manufacturers exceeded 1.6615 million, accounting for 70.14 percent of the country's total car sales. The prospects of the 2006 auto market are promising. From October, the 10 major domestic auto manufacturers will be doing everything possible to reach their end-of-year targets. A new round of competition has begun. The 2006 auto market is even more exciting than it was last year.

Shanghai GM expected to lead

Shanghai General Motors (GM) sold 234,700 sedans and 24,400 MPVs between January and August and ranked highest in monthly sales for the first half of the year. Shanghai GM successfully implemented the multi-brand strategy and emphasized competitive differences, which not only saw it take out the highest sales record in 2005, but boosted its growing profile. Shanghai GM aims to make and sell 380,000 vehicles in 2006, striving to hold onto the sales championship for another year. Based on production and sales in the first eight months, this goal is attainable. In the months to come, Shanghai GM is expected to continue dominating the market with its complementary arrangement of car models. These models include the economical LOVA, Aveo, and Sail; mid-range cars such the Excelle sedan, HRV and station wagon; and intermediate and up-market models including LaCrosse and Regal.

Shanghai Volkswagen on the rise

Shanghai Volkswagen sold 211,600 sedans between January and August, putting it on track to reach its annual sales target of 340,000. As long as it is able to maintain these sales figures for the next four months, it will reach its 2006 sales target. The popular PASSAT model has boosted Shanghai Volkswagen's sales. The new POLO has also been given a favorable review and is expected to boom in the next few months. Even if the new POLO cannot secure the sales championship for Shanghai Volkswagen, it should push it into second place.

FAW prospects optimistic

FAW_VOLKSWAGEN sold 209,900 sedans between January and August and must sell a further 110,000 to meet its target of 320,000. With the introduction of Sagitar and the new Bora, FAW has divided its mid-range vehicle market into three parts ¨C "A-", "A" and "A+". It launched an all-out attack on its competitors with this matrix pattern. The sales of Audi grew by nearly 100 percent in the first half of the year, which was enormously profitable for FAW. In the next four months, the two-box Bora will be launched and production of the Sagitar model will hopefully increase. FAW_VOLKSWAGEN is more optimistic about its prospects. It should be relatively easy for it to be one of China's three most successful auto companies.

Chery booming in two markets

Despite record-breaking sales between January and August when 167,000 sedans were sold, Chery Automobile still has a long way to go before reaching its sales target of 281,000 vehicles. In the next four months, it will have to implement a major sales drive to record a 50 percent growth rate based on the volume of last year's sales and to rank as one of China's top three auto companies. It is worth mentioning that Chery has been able to maintain good momentum in exports. In August it exported 7000 sedans. Annual exports are expected to exceed 4 million. However, Chery still has a major image problem. People need more time to test the new car.

Beijing Hyundai needs to work harder

Beijing Hyundai sold 164,900 sedans and 17,300 SUVs between January and August, just past the half-way mark of its sales target of 300,000 vehicles. It should work harder. Prior to this year, Beijing Hyundai had introduced four top car models. The Elantra and Tukson were once among the best sellers. However the sales records of the NF and Accent have been less than satisfactory. It needs to introduce new main models. Beijing Hyundai has been forced to lower its prices twice, which reflects the pressure it is under to reach its sales goals. In addition, the production capacity of key components is a major problem.

FAW Toyota cautious

FAW Toyota sold 144,800 cars between January and August, an increase of over 60 percent. Its annual sales target for 2006 is 210,000 with monthly sales of 20,000. So far, FAW Toyota has developed four top-to-bottom level products; the Corolla, Reiz, Vios and Crown. It is also gradually improving its domestic sales network. In 2005 FAW Toyota increased sales twice and ultimately reached its annual target of 159,900 vehicles, doubly its sales record. It appears FAW Toyota has been cautious in setting a sales target of 210,000 vehicles for this year.

Guangzhou Honda takes a gamble on the 4th quarter

Guangzhou Honda sold 137,400 sedans and 23,200 MPVs between January and August. Its sales target this year is 260,000. Its performance in the second half of the year will determine whether it is able to reach this target. The construction of its second plant is proceeding smoothly. The company hopes the plant will begin formal operations in the second half of this year, which eradicates the problem of production capacity. The 2006 Accord will remain Guangzhou Honda's biggest opportunity to seize the market. Production of this vehicle began in the new plant in September; now Guangzhou Honda needs decide how to improve the sales record of the new Accord.

Tianjin FAW Xiali pins hope on C1

Tianjin FAW Xiali Automobile sold 131,800 cars between January and August, of which 114,000 were the Xiali model, the second biggest sale of a single brand. Tianjin FAW Xiali aims to sell 200,000 vehicles this year and is currently more than half-way to this goal. It is sold for between 30,000 and 100,000 yuan. It has made economical cars market leaders and produces fashionable, family-oriented cars. The company is also developing up-market cars. The soon-to-be-released C1 sedan (the Chinese name is Weizhi) is expected to become a new growth point for the company.

Geely sprinting for its goal of 200,000

Geely Automobile sold 130,900 cars between January and August this year. It upgraded its production and sales target to 200,000, of which 10,000 will be exported. In the second half of the year, Geely will look for a greater share in overseas markets to reach its annual sales target.

Scheduling becomes DCPA's biggest constraint

Dongfeng Peugeot Citroen Automobile Company Limited, (DCPA), sold 128,100 sedans between January and August. Its sales target for 2006 is 200,000 (80,000 Peugeot and 120,000 Citroen), an increase of 42 percent from last year. The launch of the Peugeot 206 has increased opportunities for DCPA. However, four Citroen models and two Peugeot models are currently sharing the one production line. This has created more variables in the production process. Citroen is likely to introduce new models of mid-range and up-market cars soon. The scheduling issue will be the biggest problem for DCPA.

Editor: Yan

By: Source: People's Daily website
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