Hello, I thought today we would take a quick wander around some topics making news in Biz China- not indepth, but a quick round up. That way, if it is not of interest to you, you can move on [we mean that kindly] or use it as a base for a search for more info. This month’s round up focuses on China motoring and associated topics.
We are starting here as this was one of the industries, along with hospitality and travel that was hard hit in Jan when Covid bit in China. In some ways the China auto industry, especially China Ev and NEV [Electric Vehicles and New Energy Vehicles] took a double whammy as only a few months earlier, Gvt had removed the incentives on EV’s. At that time there were a slew of makers jumping on the gravy train, resulting in poor quality vehicles and dodgy traders.
Most recent news involves China TESLA who blocked sales to the up and growing on line E-com platform, Pinduadua who had hoped to buy in bulk and offer back at a discount. Seems TESLA however is more focused on maintaining their exclusive image and has no plans to follow Microsoft’s beginnings and see a TESLA in every car park.
Another casualty of Corona virus has been the China Expo or Trade Fair business. Usually at the start of each China New Year the circuit kicks off around the country. What few there have been thus far have been “virtual” affairs [or should that be efairs?] and by all accounts, not so successful. So we were interested to read the 2020 Beijing Auto show is slated to go ahead later next month. September.
We can expect to see AI figuring stronger this time, with cars capable of reason.
Or so their marketing goes. Perhaps, finally, we are on the way to eliminating the biggest flaw and danger in automobiles. The nut behind the wheel.
With a nod – albeit slight – to the environment as well as the economy, China Gvt has moved to introduce new rules on car recycling, scrapping. This will be welcome by environmentalists as currently, many vehicles either end up abandoned or in land fill with potentially hazardous waste seeping into water sources.
If you are a motorist you will be familiar with the issue of trying to find a “free,” in both senses, car park or having to pay near extortionist rates for one. If you have no “off street” parking at home it maybe another long walk. China is no exception. But for some residents of some second tier cities in China – but still with first city traffic woes- there may be some good news on the horizon. This story on how some China local Governments are using smart parking to help ease that comes courtesy of China Daily.
Back in June this year we reported how Mercedes Benz sales in China had bucked the global luxury vehicle [downward] trend. Figures for the current period show that China domestic autos accounted for a little over 40% of total sales this year so far. It will be interesting however, to see if Chinese brands can hold that advantage in the wake of very recent Gvt changes to regulations regarding foreign brands generally in China. Many of these new regs level the playing field by removing conditions that applied only to foreign players in China. Only recently VW moved to take advantage of these updates by taking control of what once were its China partners.
As an addition to the above article, Covid19 revenge buying seems to have delivered a boost to local carmakers in July. Domestic auto makers market share increased by 31% or +1.7% from June. In total, 585, 000 Chinese branded passenger cars were sold. An increase of 4.5 YOY. [Year on year] However, total sales for the year are still 25% down on 2019, so hold the champagne guys.
To finish, let’s look a little at the psychology and biases involved in consumer’s purchasing.
Last year some time Black and Decker announced the move of some of their drill business back to the US from China. This was met with a flood of positive comments, the general theme being that B&D had been rubbish [or similar short words] ever since it left the US. Yet I recall that back in the 1980’s, B&D were only ever a lightweight home handy person tool. If you wanted something serious that went the distance you bought German or Japanese.
Now, what caught our eye was the star sales performance, of what was the old British Leyland Motor Corp’s MG marque. Morris Garages or MG became known and respected for its permanence cars before undergoing several mergers and takeovers. Eventually ending up as a bland sedan version of -[insert the brand depending on what country you lived in] – badged as MG with maybe a sporty muffler, steering wheel and nice racing stripe down the body. Just a mundane sedan but it sold on its name and pedigree.
So it wasn’t really surprising to read that MG model’s overseas sales in the first half of 2020 surpassed 70,000 units, up 37 percent year-on-year. The regions that reported the most significant sales growth include the Middle East, Southeast Asia, Australia and New Zealand, and the UK. Probably those already familiar with the brand and its history?
Maybe even possibly including some who swore they would never buy a Chinese vehicle?
A bit like B&D maybe?
Ahhh, the psychology and biases involved in consumers purchasing huh?
What was it Dylan wrote: for everything there is a season, turn, turn, turn.
“We are confident that our MG brand will be able to reach annual global sales of more than 1 million vehicles by 2025,”Wang Xiaoqiu, president of SAIC Motor
To learn more about SAIC, its connection with MG and probably a lot more, feel free to check this page out, brought you by Stuff NZ.
OK, that’s it for today.
We hope you enjoyed this quick round up, found something interesting. If not we are sorry about that. Please, drop us a line, let us know what interests you and we will do our best to source and include it in future editions.
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