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Launch of many new models won't make auto market rosy

George Gao From Gasgoo.com| April 08 , 2008

Shanghai, April 7 (Gasgoo.com) Do you know how many new car models were launched onto the Chinese market in March? And how many are lining up to be rolled out in April? Here we’ll list the new models one by one: according to industry statistics, the 17 models released in March are the Peugeot 307, Mazda3, Roewe 307, Young Lotus RCR, Beijing Benz C, Changfeng-qilin, Dongfeng Ni’san's Qashqai 2.0, Subaru 09 Forester, JEEP Wrangler, 2008 Cadillac CTS, three-door Pajero, Brilliance Splendor FRV, NEW VIOS, Chrysler Sebring, Dongfeng Nissan Qashqai, Dongfeng Honda CRV (2-wheel drive), and BYD F6. In April, another nine new models will be rolled out: Changan Mazda2 Jingxiang, Dongfeng Nissan's Livina C-Gear, Dengfeng-Citroen’s Elysee, Beijing Hyundai’s hatchback Elantra, Guangzhou Toyota’s Yaris, GM Buick’s New Excelle, Dongfeng Nissan’s New Teana, GM Buick Enclave, and Jaguar XF. It is something of a rarity in China’s auto history that nearly 30 new car models are launched simultaneously in two consecutive months.

The reason why manufactures have been launching so many new models these days is obvious: they hope to put their new products onto the market before the upcoming 2008 Beijing auto show on April 20-28, and try to perform better in the busy auto-selling month April. In China’s auto market, it is not easy for manufacturers to choose the best selling season. Before May Day (May 1st), cars sell best in China, and therefore most car-makers will rush up to seize the golden days by launching their new models by early April. When the rainy month of June comes, fewer cars can be sold and the sales figures in the first half the year will be considerably affected.

In addition, the prices of new cars can not be reduced this year as so much as in the previous years. The roll-out of new models is seen as one way to ease the pressure from the rising cost of raw materials. Rao Da, general secretary of National Passenger Car Information Exchange Association, noted that the increase in the prices of raw materials and in the workforce cost will accordingly raise the cost of each vehicle by about RMB 3,000 ($427). The cost of a revamped model will also increase because it is necessary to make the devices for molding, checking and other processes. Compared to the price growth of the previously launched cars, it seems logical and acceptable to raise the prices of the new models.

However, the too-quick and too-frequent release of immature new models onto the auto market will not attract the attention of customers; on the contrary it will escalate the corporate burden of the manufacturers. Many names of the new cars will have disappeared before they are remembered by the customers. The statistics from the China Association of Automobile Manufacturers (CAAM) show that no all-new model is listed in the top 10 best-selling sedan models in 2007. Which means that China's competitive auto market, now flooded by so many new models, will not look rosy in the days ahead this year.

Gasgoo not only offers timely news and profound insight about China auto industry, but also help with business connection and expansion for suppliers and purchasers via multiple channels and methods.

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