Showing posts with label China Car Sales. Show all posts
Showing posts with label China Car Sales. Show all posts

Wednesday

Cash for Clunkers goes to China as the world's largest auto market clogs in smog


Can you teach an old Chinese dog a new American trick? Maybe, according to TheTruthAboutCars.com.

Because of their population base and the ratio of cars to people, China is the world's largest automotive market. And their big cities are choked up with traffic and the smog it produces.

In spite of that, and after years of double digit sales growth, April numbers saw China's sales drop 14% and that has Chinese bureaucrats worried because numbers for May are apparently even worse.

So worried that China's Ministry of Commerce borrowed an American idea - cash for clunkers.

That program let US auto owners trade in their older cars for newer ones and get up to $4,500 bonus money. Well, the Chinese are calling their cash for clunkers program "early retirement" for vehicles. They are offering between $1,700 and $2,800 for old vehicles when new ones are bought.

The "early retirement" program also covers farm vehicles and buses and heavy duty trucks and is intended to avoid an economic slowdown that can hurt the Chinese auto industry which, like America's auto industry, largely fuels the national economy in China, according to TheDetroitBureau.com.

In the US, analysts say the cash for clunker program caused an extra 625,000 vehicles to be sold that would not otherwise have happened and the Chinese are hoping to duplicate it or do even better. There were plenty of critics around for the US program but in China, where the press and the people are far more tightly controlled, there isn't a critic to be found.

Who knows - if they sell enough of them, maybe we'll open a lemon law office over there. Meanwhile, if you are over here, and you've got a lemon, we can help. Getting rid of lemon cars and lemon trucks is what we do.

Sunday

Sales and Fraud Seesaw

The Dayton Busines Journal, like many business publications, say that auto sales are slowing down. It's happening in Denver and nationwide, but what does it really mean for you?

We've noticed a consistent trend over the years, when it comes to manufacturer's quality. It doesn't mean slow sales at all. To understand it, though, you have to realize that new car sales are only a small part of the average dealer's income. "There's a hundred ways to make a buck," we heard a car dealer say once, and we believe it.

Car dealer operations are set up in departments. They make money from every department. New car sales, used car sales, parts, service, F&I, body shop, etc. Car dealers set up each department as a separate income source and then usually pay the manager of each department on a commission basis, in order to force each department to earn make its own profit. That way each department is its own "profit center."

So when sales slow down, what happens?

What we consistently have seen over the years is that when quality goes up, the dealer's service department income goes down. The dealer operator, used to seeing the overall operation earn a certain amount of money, puts pressure on the other departments. The result?

Things that might have been covered by your extended warranty, aren't covered in the service department. The extended warranty being sold in by F&I costs a little more. Your insurance company gets a body shop estimate that's a little higher than expected because of "hidden" damage. These costs are often hidden from the consumer in one way or another.

Instead, more customers start hearing about "negative trade in equity" and other scams that cost you money. But where do you see it most?

Well, usually when one department's income goes down, the pressure is on for another to go up. What we have often see over the years is that when new car sales go down (like right now), the fraud in the used car sales department goes up. Best example? Last week.

Last week we had three different consumers call us for help from different parts of Ohio and in each case they had been sold a wrecked car without knowing it. That's doesn't surprise us.

If you read in your local paper that new car sales are down, be careful. That's not the time for you to get a tune up at your dealer, no matter how much you trust them. That's not the time to go used car shopping either.

You have to be careful. Car dealers are out to make a buck and if they don't make it in the new car sales department, you can bet they're making it somewhere else. Don't let it be off you.

Saturday

The Hottest Car in Hong Kong

Recently we heard some rightfully deserved bragging by Buick that Buick's sales in China this year were higher than its US sales. China?

Okay, so I wondered: what's the top selling car in China, anyway? And what's the hottest car selling in Hong Kong?

Just what's going on in the Asian car market anyway and why should the US care? Well, there are two very good reasons.


The Asian car marketplace is inside the triangle formed by Australia to the south, Korea to the north, and India to the west. Inside that triangle are India, China, Thailand, Malaysia, Indonesia, Phillipines, Vietnam, Singapore, Hong Kong, Taiwan, Japan, Korea, and Australia.

Population is the first reason to pay attention to the Asian car market. It matters because more people = more car sales.


People generally know that China has the largest population of any country on the planet with 1.3 billion people. What you may not know is that India has just over 1 billion. The other 11 have a combined population of about 700 million. That's a total of 3 billion people.


No one can ignore a market of that size. It's certain that Asian car makers aren't ignoring their own market and neither are the Europeans. Some American brands aren't either, as seen by the fact that Buick sold more
cars in China in 2006 than they sold in the US (listen up, Ford, Henry wasn't so myopic either).

Who makes the most money, according to the "purchasing power parity" per capita international standard? Hong Kong ($33.4k), followed by Australia ($30.9k) and with Japan ($30.6), just beating out Singapore (at $28.3k). Okay, compare that to the US per capita wealth of $41.4k. Yeah, the US is ahead, but not by all that much. So, if US residents can have two or three cars per family, then why not Asia?

Okay, Asia has people and Asia has money. So what are they buying?

What is the hottest selling car in Hong Kong (and everywhere else)? Here's the scoop from Segment Y, a Dutch company that monitors vehicle sales in the emerging Asian marketplace...

The top car in Taiwan? Toyota's Corolla with a 9.4% market share there. That shouldn't be a surprise. The model is known worldwide for its high reliability and high miles per gallon. 30 million have been sold since its launch in 1966. Corollas are currently manufactured in Japan, the United States (Fremont, California), the United Kingdom (Sunderland), Canada (Cambridge, Ontario), Malaysia, China (Tianjin), Taiwan, Pakistan, South Africa, Brazil, Turkey, Philippines, Thailand, Venezuela and India.

The hottest car in Hong Kong? The Corolla again, with a 5.2% market share. Singapore: Toyota Corolla (11.9%). Thailand: Toyota Soluna Vios (25.1%). Indonesia: Toyota Innova (25.0%). Phillipines: Toyota Vios (22.0%). Vietnam: Toyota Zace (19.1%) . Hong Kong: Toyota Corolla (5.2%). Taiwan: Toyota Corolla (9.4%). Japan: Toyota (31.7%). Coincidence? Hardly.

Here's the breakdown for the biggest players in the region:


China: Tianjin Xiali with 6.2% of the market. 6.2% doesn't seem like much, but also consider the fact that there are over a hundred motor vehicle manufacturers in China now. Most of the multinational car makers are building in China too, with sedans by Honda, GM minivans and Toyota suv's. With a billion-person market to split up, it's no wonder.

And then there's India. Here the Maruti Alto has a16.8% market share. In fact, different Maruit models (there are eleven) take 4 of the top 6 India market spots. With a rising economy and a rising demand for automobiles, it's no wonder the market for new car sales is rising too. Most of the multinational players are joining the sales fray.

So what's going on in the Asian car market? They're building, selling and driving new cars. Oh yeah, and there's another reason US car makers should care. Actually, 3 billion of them. But if they don't get their "US act" together, it won't matter. Oh yeah, one other thing, even China has lemon law. Granted it's not as strong as US lemon laws, but it's a start.