Segmentation of the passenger car market


The most striking aspect of the developing passenger car market in the past six years has been the growth in private ownership. As Figure 6.1.2 shows, the proportion of automobiles sold to individuals and private enterprises rose from 10 per cent in 1995 to an estimated 50 per cent in 2001. Private sales rose from approximately 32,000 to 375,000 units over this period, a more than eleven-fold increase.

The share of the taxi sector fell from 30 per cent in 1995 to 24 per cent in 2001. Sales growth potential has been constrained in many cities which have capped their taxi populations but the market of 180,000 units annually remains attractive.

At the other end of the market spectrum, the share of sales to state-owned enterprises and to central and local government have declined by two- thirds and one- third respectively to 10 per cent each (75,000 units in 2001). Automobile sales to joint ventures and wholly - foreign owned enterprises also declined by two-thirds, to 37,500 in 2001. It seems very likely that these sectors have declined further in 2002 in favour of the increasing private sector.

The current segmentation of the market in terms of units sold is reflected in a dispersed price segmentation. China lacks a significant middle class population and the demand for passenger cars is concentrated in two segments: compact automobiles priced at less than RMB150,000 (US$18,000) which account for 58 per cent of the market (24 per cent at less than US$11,000) and mid- to high-end cars priced over RMB250,000 (US$30,000) which account for a further 24 per cent market share.




Doing Business with China
Doing Business with China
ISBN: 1905050089
EAN: 2147483647
Year: 2003
Pages: 648
Authors: Lord Brittan

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