Auto Expo reveals close competition in Chinese market

Visitors take pictures of models at the 11th China Changchun International Automobile Expo in Changchun, capital of northeast China's Jilin Province, July 11, 2014. The ten-day expo kicked off here Friday. (Xinhua/Xu Chang)

A fierce competition is being staged at the ongoing Changchun International Automobile Exposition among auto dealers as Chinese customers have become picky when buying cars.

Zhang Yue, a local in Changchun in northeast China's Jilin Province, said he was a bit undecided in the face of the price cuts given by auto dealers at the expo.

With a budget of 250,000 yuan, Zhang said the options were too numerous for him to make a quick decision.

"I need to shop around and make a good comparison in the cost performance of domestic brands and joint venture brands," he said.

Like Zhang, many consumers in China hunt for bargains and value both product quality and cost.

Yu Yang, a manager with the FAW-Toyota Sales Company in charge of the northern China market, told Xinhua that price discounts have become an increasingly important factor in the buying decisions of Chinese consumers.

"Auto makers, no matter world class brands or domestic brands, have to consider their pricing strategies more seriously these days to avoid being put at a disadvantage," said Yu.

At the expo, which lasts from July 11 to July 20, local auto brands and joint-venture brands such as FAW, Mazda, Ford and Volkswagen all offered deep discounts to buyers. Even luxury manufacturers such as BMW and Mercedes-Benz have marked down their prices.

Analysts attributed the fierce price competition to rising auto output. Statistics from the China Association of Automobile Manufacturers (CAAM) showed that China's automobile output exceeded 11 million units during the first half of 2014, up 9.6 percent from the same period last year. Meanwhile, many cities have put a ceiling on car purchases by adopting car lottery systems to combat traffic jams and air pollution.

Apart from competitive price cuts, new energy vehicle have also emerged as a battleground.

From January to June, the output of new energy vehicles in China more than doubled from the same period last year to 20,962 units, while sales over the same period rose to 20,477 units.

Dong Yang, secretary-general of CAAM, said that rising product quality and growing public environmental awareness have made new energy vehicles a new growth point in China's auto market.

Supportive government polices have also given a boost to environmentally friendly products. To save energy and combat pollution,the Chinese government announced on Wednesday that new energy cars will be exempted from a 10-percent purchase tax starting from September 1 to the end of 2017.

The preferential policies will benefit buyers of qualified pure electric cars, plug-in hybrid electric cars and fuel cell cars.

To cater to the rising demand for new energy vehicles, special booths were set up at the Changchun auto expo where visitors can view up-to-date technology, new materials, and innovative designs in new energy vehicles.

"Although we cannot immediately benefit from the preferential policies at the expo, future competition over new energy vehicles will be exciting," said Sun Shubo, customer manager of BYD Automobile.