Car importers struggle to compete ( 2003-09-10 13:53) (Shanghai Daily)
While sales of imported luxury cars are growing in Shanghai, dealers of low
and medium-priced imports are struggling to compete with domestically produced
rivals.
Shanghai Waigaoqiao Automobile Exchange Market Co Ltd, which manages the
city's largest imported car exchange, sold 1,036 imported vehicles last month,
an increase of 99.2 percent from a year earlier.
Luxury sedans and sports utility vehicles were responsible for the bulk of
that increase, according to the company.
The company's bestseller last month was the Mercedes-Benz S350. It sold 114
of the cars for an average price of about 1.37 million yuan (US$165,000) each.
"Demand has kept booming over recent months in spite of price increases,"
said Bai Yingxin, a company official.
"There is already a very large group of private business owners in China, and
many of them believe that the brand image of imported cars, especially luxury
cars, can better represent their social status. That is the reason for the
strong demand,"said Yale Zhang, an analyst of Automotive Resources Asia Ltd.
Analysts note, however, that increased sales don't necessar-ily mean higher
profits for car dealers.
"Imported cars at middle and low-price level (usually below 400,000 yuan) are
becoming less attractive as many new domestically made models were launched in
recent months," said Xu Zhiyuan, a marketing official from Shanghai Yongda
Group, the city's leading car dealer.
"There is not too much difference in quality but the domestic models are much
cheaper."
The poor state of the low-end import market has pushed a growing number of
dealers to compete in the luxury market, making it far more competitive, said
Xu.
China still sets a quota on the import of cars and car
parts.
