Warc Blog

China's car ban extended

18 July 2013
BEIJING: Restrictions on sales of new cars are expected to be extended in China as authorities seek to tackle congestion and pollution, but observers expect overall sales will be unaffected.

Beijing, Shanghai, Guangzhou and Guiyang already restrict sales by limiting the number of licence plates and selling them to consumers through auctions and lotteries. Chengdu, Chongqing and Wuhan are among the eight cities which could soon join them under new rules imposed by the state.

Shi Jianhua, deputy secretary general of the China Association of Automobile Manufacturers, warned that the move could lead to a 400,000 drop in national car sales, but analysts said growth elsewhere in lower tier cities would more than make up any fall.

Bob Socia, head of China operations for General Motors, told Reuters: "If all 25 cities with severe traffic situations in China were all to implement restrictions in 2015, we estimate that the impact to GM car sales would only be about 2% to 3%."

Meanwhile, the Financial Times reported that General Motors was the top selling automaker in China for the first six months of 2013, approaching 700,000 sales according to data from China Association of Automobile Manufacturers. This report counted Volkswagen's two joint ventures separately – together the two units sold nearly 1.5m vehicles in the first half of the year.

Separately, a new report from Accenture observed that the consumer car market in China was still immature, with consumer behaviours evolving. "There is still plenty of time and plenty of room for other local and foreign auto manufacturers to capture significant market share," it said.

The report identified several pertinent insights, to add to the continuing importance of brand prestige to buyers.

Telematics is increasingly a factor, with 85% of consumers looking for in-vehicle technologies, particularly navigation support, WiFi and real-time traffic data.

In all, 64% sought advice from family members and a similar proportion was influenced by views shared on social media. They also looked at makers' websites (53%) and asked for recommendations from friends and colleagues (49%).

Accenture, noting the high figure for social media, suggested that automakers and dealer might usefully establish a strong presence there and forgo large investments in television and radio.

"We believe that digital marketing holds particular promise for automakers looking to build strong consumer relationships and ultimately sell more cars," it said.

Data sourced from Accenture, Financial Times, Reuters; additional content by Warc staff

 
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