Auto Market in China Struggles During Economic Slow Down

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auto market in China

The Chinese economy is admittedly getting better, with many sectors within the economy such as online stores, recreational activities, and the like getting more and more business. However, the auto market in China is not getting any better. Just over a year ago, the auto market in China was performing fairly well, with many luxury automakers finding their cars were being purchased by high end consumers often. Now, the auto market seems to be bottoming out, and this has brought many economists to question why?

Why the Auto Industry Sees No Economic Improvement

Many economists are theorizing the Internet is to help with the economy shift that is being seen. More and more consumers are getting access to the Internet, opening up a whole new world of products and goods that were not available to them beforehand.

Read how the Internet is meant to bring back the Chinese economy here

The question as to why the car market has slowed to a halting stop in China is a question being posed by several people. A recent study by Sanford C. Bernstein and his associates, better illustrates the specific reasons why consumers are no longer interested in purchasing cars. Those who were asked questions were married couples, who are considered to be in the mid to higher income brackets located throughout China. This demographic is who the auto market would target as they are more likely to purchase new cars.

The reasons as to why these participants gave for not buying new cars included:

  • The slumping equity market was often the reason why they believed others were not buying cars.
  • When asked about their own personal reasons, they cited:
    • Macro-economic concerns
    • Widening discounts on cars
    • License plate restrictions
  • When asked why sales across the country were seeing a decrease, those who participated responded:
    • Economic uncertainty
    • Stock market concerns

The Future of the Auto Market in China

Right now, automakers may be getting antsy when it comes to their cars being on the market and no one buying them, however, this is not going to last forever. Already the government is taking some steps in order to help boost the Chinese auto market. In addition, as the stock market is no longer affected, as the economy starts to expand, more people are going to feel comfortable with purchasing a new car. As long as auto makers keep giving discounts on the new cars they bring to the Chinese market, the consumer is going to feel as though he or she is getting a good deal. Getting a good deal is a part of the buying decision for all Chinese consumers, and is something that automakers need to keep in mind.

Read more about Chinese consumers and their buying power online here

About Author

Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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