Fierce competition between China CarMakers & Foriegn Brands: Domestic car manufacturers in China are locked in a brutal struggle for market share and pricing edge. Foriegn brands including GM have formed partnerships with local Chinese manufacturers to gain a growing portion of the Chinese annual car sales of over 7 M in 2008 [6.2M in 2007].
Only 4% of the Chinese population owns a car, compared to 80% in the U.S. VW and GM are well entrenched in the market. VW has 17% market share; GM 10%. Chery had the most sales in 2007 with nearly 500,000 in sales.
Prices are falling as the competition sets in and a shakeout is near so smaller companies are going to be taken over by larger Chinese manufacturers and foreign makes.
What this means to U.S. Auto dealers? -- Aggressive and persistent efforts to sell franchises for Chinese vehicles and to sell small China-made cars and small trucks in the U.S. in the next 3 years. As in China -- which ones are going to be the "winners" in the market with safe, fuel effecient, even green vehicles? We have new competitor on U.S. soil and in the marketplace.
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