Losing ground

prototype.com.hk

A model poses next to a Changan car during the Beijing auto show in April. Photo: CFP China's homegrown auto brands are losing ground amid increasing competition with foreign brands. Market share of homegrown brands have shown a year-on-year drop for 11 consecutive months as of July, data from the China Association of Automobile Manufacturers (CAAM) showed on August 8. The declining trend may continue to the end of this year, when new models from homegrown brands may start to reverse the trend, analysts said.In July, homegrown auto brands sold 151,400 units of sedans, down 22.66 percent year-on-year. The sales account for 17.7 percent of China's overall sedan market - the first time it dropped below 20 percent since the number was first announced by the CAAM in November 2008.Back in 2009, the market share of homegrown branded sedans was 29.67 percent.Lack of choice"The lack of good products is the main reason behind the continuous drop [of homegrown brands' market share]�� and some domestic brands have paid too much attention to brand building," Zeng Zhiling, a senior analyst at consultancy LMC Automotive, told the Global Times on Monday.In the first seven months of 2014, homegrown auto brands sold a total of 1.52 million units of sedans, down 16.1 percent year-on-year, and the sales accounted for 21.68 percent of the overall sedan market, CAAM data showed. German auto brands play a leading role in the sedan market, accounting for a 28.75 percent share of the sedan market in the January-July period, followed by Japanese and US automakers with 16.7 percent and 16.3 percent shares respectively, CAAM data showed.German carmaker Volkswagen alone has sold 1.8 million units of cars in China in the first half of this year. Its two joint ventures in China, FAW-Volkswagen and Shanghai Volkswagen, ranked No.1 and No.2 in the sedan top sales list in the first seven months. Changan Automobile was the only homegrown automaker that nudged into the top 10 sedan sales list in the January-July period, ranking ninth in the list. Zeng said that new models have been the major driving force behind its sales growth recently.The company sold 226,600 units of sedans in the first seven months this year, up 29 percent year-on-year. The share of homegrown brands in terms of passenger car sales, including the sales of sedans, SUVs and minivans, also dropped to 34.55 percent in July, compared with a share of 35.2 percent in July 2013, CAAM data showed.Grim outlookChina's homegrown auto brands previously accounted for the largest share of the sedan market before June 2013, given its advantage in the segment featuring cars priced below 100,000 yuan ($16,238). However, as foreign brands start to roll out more models in the segment, domestic brands are losing ground. Also, as foreign brands further cut prices of their premium models, it is becoming increasingly difficult for domestic brands to compete in the high-end sector."Homegrown automakers should first strengthen their market position in the middle- and low-end segment before they can move upward to gain a bigger share in the high-end market," Zhang Yu, managing director at Automotive Foresight (Shanghai) Co, told the Global Times on Monday.Major foreign auto brands like Mercedes-Benz and Audi recently announced that they would cut spare parts and maintenance prices, which may also pose a threat to domestic carmakers, experts noted, as high maintenance fees had been one of the factors pushing away some Chinese consumers.In addition, car purchasing restrictions in major cities like Beijing, Shanghai and Guangzhou have also dimmed the sales of cheaper domestic cars, as people tend to buy more expensive models once they get the chance to own a car.Domestic auto brands used to account for about 20 percent of the market in Beijing before it rolled out purchasing restrictions in December 2010, media reported, but "now their share is under 10 percent," Zhang said.Tianjin Faw Xiali Automobile Co, whose Xiali brand used to enjoy great popularity among Chinese consumers in the 1990s, said on July 15 that it may see a net loss of around 400 million yuan in the first half of 2014. The company has been reporting declining profits for three consecutive years."Homegrown brands are going to face huge pressure in the short term, but in the long run, I still hold a positive attitude, as they are making gradual progress in technology and product design," Zhang noted. Tags: Rapid Prototyping, Rapid Prototyping China, Plastic Tooling, Plastic Tooling China, Rapid Prototype, Rapid Prototype China, Rapid Tooling, Rapid Tooling China, CNC Prototype, CNC Prototype China, Functional Prototype, Functional Prototype China, Metal Prototype, Metal Prototype China, Plastic Prototype, Plastic Prototype China, Rapid Manufacturing, Rapid Manufacturing China, Low volume production, Stereolithography, Stereolithography China, Vacuum Casting, Vacuum Casting China, whatsapp marketing, wechat marketing, seo, e marketing, �W��OӋ�ṩseo, e marketing, web design by zoapcon