Soaring Sales of cars in China

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In recent years, per capita income had increased to around $1300 in 2011.  More and more families are able to afford their first cars and they are also desired to purchase cars for the last few years. Therefore, overall sales for cars were generally increasing in 2011.

Volkswagen announced a 10% sale increase in 2011; Sale of Audi luxury vehicles increased by 24% in China in 2011;

However there are more details to be concerned about car sales with respect to the consumers’ purchasing behaviors.  

First and foremost, the purchasing quantity should have been cut down according to relevant policies and regulations. The government announced series of policies of issuing limited license plate numbers to control the amount of cars which are drove on the road each day. The purpose of those policies is to relieve serious traffic problems to certain extent in first-tier cities. In some cities, the government even restricts specific cars with specific numbers on the road in turns each week. Let’s say my plate number is “BZ631”. If “6” is not allowed on Monday, I will have to leave my car at home on Mondays. However the truth is that people tend to buy more cars in a fear of inability to get a license plate number when they need it. In other words, it even promotes the sales surprisingly. Similarly, the crazy I-phone sale in China reveals the same consumer behavior in China:

Once the consumers have the consciousness that they probably don’t have chance to get the specific products in future, they will buy the products even if they don’t need it temporarily.

Secondly, the demand of cars is still profound in China even though China has a relatively advanced public transportation system. As we all know, China has a population of over 1.3 billion, thus the government has invested a large amount of money into building a better transportation infrastructure all over the country. Not everybody is benefiting from this amazing public transportation because car owners tend to drive their own cars. From some of their perspective, owning cars, especially a luxury car is a status symbol. As the development of the economy, more and more car owners regard driving cars as a convenient trip model. However traffic jams become the most frustrating issues in their lives.

For sure, those problems will impact on their consuming habits within certain years. All the international companies such as Toyota, Honda, Volkswagen, Audi, Ford and so forth have to pay much more attention to the changing of Chinese consuming behavior closely. In that way, they will have faster and better actions to tackle with corresponding demand changes and marketing issues in the future.

 

 

 

 

 

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1 thought on “Soaring Sales of cars in China”

  1. Hi Emma,

    This is very interesting that the license plate impacts the sales of cars in China and the fear of being limited to certain days of travel. I think that soaring sales are reflective of the increase in gdp and living standards because of the increase in ability to purchase and boost perhaps a different image of life. An image that consists of life with means or luxury and happiness through increased consumption of a luxury good.

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