Warc Blog

Automakers continue to target China

10 July 2014
HONG KONG: China has lost none of its appeal for major automakers despite a slowing economy, with brands such as Skoda and Infiniti seeking to boost sales and their market share in the country.

At present, China is already Infiniti's second-biggest market after the US, according to company president Johan de Nysschen.

Its Chinese sales more than doubled in the first half of this year on an annual basis, and could well reach 30,000 units by the end of 2014. And de Nysschen also hopes that total might double again by 2016.

This breakneck pace is, in part, dictated by the intention to begin manufacturing vehicles locally. "We do not have the luxury of a long, gradual ramp-up in terms of volume – we have to climb very fast in order to insure local production is feasible," de Nysschen explained to the Wall Street Journal.

Growth in the Chinese market is also central to achieving Infiniti's ambition of selling 500,000 vehicles worldwide by 2020, up from a 2013 total of just over 171,000.

Affordable prices are a major plank in de Nysschen's plans to attract younger drivers, who are predicted to make up 80% of China's car-buying audience in the next few years. He described the target group as being salaried workers who earned a good income but were unable to afford a top-of-the-range car.

"This is leading to the emergence of a new definition of premium, which is one that is not so rooted in conspicuous consumption," he said. "They don't want a big car at a big price."

While Skoda is not focused on the premium end of the market, it is looking carefully at the segments it operates in, in a bid to reverse a slump and lift sales by 10% or so in 2014.

"We did a lot of homework regarding the brand and also the vehicles," Andreas Hafemann, Skoda's president in China, told Bloomberg. "With the products, it's the expansion, it's going into segments [in] which we were not positioned in the past." 

That has entailed less of a focus on sedans and the development of new models for the compact car and SUV markets.


Data sourced from Wall Street Journal, Bloomberg; additional content by Warc staff

 
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