Chinese car makers struggling even as overall car sales rise

Sales of Chinese-made cars in China have fallen this year as that nation’s overall car sales have grown strongly.

Dow Jones Newswires reports that, according to data from the China Association of Automobile Manufacturers (CAAM), sales of Chinese-brand passenger vehicles dropped by 0.1 per cent in the first four months of the year when compared with the same time last year.

The disappointing result for local manufacturers comes as the passenger market, as a whole, grew by 10 per cent to 6.48 million vehicles.

But this rise has been enjoyed by foreign car makers. For example, in the first four months of this year sales of General Motors cars increased by 11 per cent to 1.2 million vehicles, while sales by Volkswagen's two joint ventures in China increased by 20 per cent to 1.1 million vehicles.

The poor performance of Chinese brands can be explained by the fact that the nation’s growing middle class are becoming brand-conscious and see foreign brands as more attractive. In addition, foreign car makers are now making cheaper cars.

Speaking at a press conference in Beijing, Dong Yang, the executive vice chairman and secretary-general of the CAAM said that local car makers lack competitiveness.

"The problem has become more outstanding as consumers are more demanding for brand competitiveness," he added.


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