"Over the next five years, domestic own brand manufacturers can't afford to make any mistakes, otherwise it will be incredibly difficult for them to continue developing," Director of the State Information Center's Department Information Resource Development Xu Changming stated at the 2014 China Automobile Brand Sales Summit held earlier this week.
Mr. Xu's statement was made in response to own brand manufacturers' poor performance in the Chinese passenger automobile market over the past several months. According to statistics from the China Association of Automobile Manufacturers, a total of 1.52 million own brand sedans were sold from January to July of this year; that number is 16.1 percent less than figures from a year ago. Furthermore, own brand sedan sales have been falling for the last 11 months in a row.
Own brands' market share has also been plummeting. According to a report appearing in theNational Business Daily today, the combined share held by own brand manufacturers in the sedan market fell under 20 percent in July, totaling 17.65 percent. That figure is the lowest recorded since 2009.
Luo Lei, deputy head of the China Automobile Dealers Association, commented on the issue, stating that own brand manufacturers must face reality. He added that when conducting research and development for new products, own brands must first conduct proper market analysis. He commented that consumer tastes were noticeably increasing, and that own brand need to be aware of this as they continue to develop.
Mr. Xu remarked that while own brand manufacturers developed smoothly from 2000 to 2010, they started to fall back after new policies encouraging sales of low emission automobiles were introduced. Own brand sales have fallen 3.5 percent this year.
"Over the next decade, the Chinese automobile market will maintain annual growth of over ten percent," Mr. Xu explained, adding that the market will continue to shift from eastern to western cities. Mr. Xu gave the following advice for own brands: first they need to demonstrate their unique advantages, boost their competitiveness and, finally, expand their sales networks to compete with JV and imported products.
