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The Chinese Passenger Car Market Is Experiencing Strong Competition
added: 2006-11-30

The Chinese passenger car market is experiencing strong competition. Besides prices, automakers are also competing on feature differentiation, as they find themselves under pressure to distinguish their products.

Increasing demand for passenger vehicles has hiked vehicle production thereby driving demand for active and passive safety systems to be equipped in passenger vehicles. The penetration of antilock braking systems (ABS) and airbags systems further aids the growth of this market. Increasing safety concerns are influencing market growth to a certain extent, says the analyst of the study. Moreover, prices of new technology active safety systems such as ABS, electronic stability control (ESC), and tire pressure monitoring system (TPMS) have been showing a decreasing trend, which is expected to make them more affordable for vehicle manufacturers for use in a wider range of passenger vehicles.

The Chinese passenger car market is experiencing strong competition. Besides prices, automakers are also competing on feature differentiation, as they find themselves under pressure to distinguish their products. As safety is becoming more important than price as a selling point to attract car buyers, the adaptation of new active safety systems can provide this differentiation to win customers from competition, particularly in the high-end passenger car segment.

Despite decreasing prices of new technology safety systems, the market is still in its growing stages. The lack of knowledge in Chinese consumers about the importance and benefits of safety systems hinders market growth to a certain extent. Since price is the key competitive factor for vehicle manufacturers to sell their products, a majority are using less expensive safety options to keep vehicle costs under control.

Despite the lack of awareness, this market is bound to grow as besides offering safety protection to passenger car occupants, some active safety systems also provide comfortable driving benefits to the driver. For example, adaptive cruise control system facilitates highway driving. These technologies offer a higher degree of relaxation to drivers, notes the analyst. The demand for these technologies is expected to increase, especially in the high-end executive passenger car segment.


Source: Business Wire

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