BIZCHINA / Pricing Trends |
Mid-class autos witness big price cut(Shanghai Daily)Updated: 2007-03-14 13:52 The mid-class vehicle segment, which is becoming the
mainstream sector in China, took the lead in price cuts last year compared with
the luxury model and mini car sectors.The average auto price in the mid-class
sector dropped 7.2 percent last year compared with 5.6 percent reduction for the
auto market as a whole, according to a report from Cheshi.com, an independent
Website after monitoring over 1,700 mainstream models in the
market. "The mid-class sector has been the most competitive
market and its price has been dropping at a fast pace since March," the report
said. Prices in the compact car segment dropped 6.6 percent,
the second biggest decline, followed by 5.5 percent in the mid-to-high class
sector, the report said. "China's fast growing economy has made cars more
affordable to Chinese customers and the mid-class sector has the biggest
potential," said Zhang Boshun, secretary of China Association of Automobile
Manufacturers Market and Trade Commission. Volkswagen AG's Jetta, General Motors Corp's Excelle as
well as Hyundai Motor Corp's Elantra now dominate the mid-class car sector with
annual sales around 170,000 units. Car makers used to cut prices to maintain the
attractiveness of their old models amid the influx of new models, especially
when Chinese first-time buyers have less brand
loyalty. The report predicted auto prices will continue to drop by
five percent to seven percent this year, and the mid-class segment will also see
the biggest reduction. However, the mid-to-high class segment will replace the
compact car sector as the new battle ground for car makers as affluent Chinese
auto buyers begin to upgrade their models.
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