need someone reliable to help me complete a report?I will attach the document about requirements?tips is negotiable as long as your answer is satisfied by me. This report is about Chinese Auto Market?there are three companies choosed?BMW, BENZ and AUDI. The products will be compared from those companies are 5 series?E class and A6 series. PLEASE read the attached documents carefully? it is really important. Using the font called calibri and font size 11.
Running head: Chinese auto market Summary of the Chinese Auto Market Your name Your institution Date of submission Chinese Auto Market 2 Introduction
The ever advancing technology and the increased environmental conservation awareness
has greatly revolutionized the automobile industry. There is an increasing pressure from the
environmental agencies requiring automakers to adopt fuel-efficient technology innovations and
clean sources of energy when designing and manufacturing their products. In addition the
decreasing oil reserves in most states has necessitated the need of producing vehicles with energy
star certifications. Most of these vehicles are designed with the latest technology making them
more luxurious, sleek and more appealing to potential car owners. Some of the mid-class
luxurious sedans include Audi A6, Benz E, BMW 5 series and Cadillac CT6. As a rapidly
developing country, China is one of the countries that forms the largest market share for the
luxurious cars produced by various companies such as General Motors, Toyota, BMW and Audi.
The following section provides a summary of luxury automobile market in China (Calabrese,
Summary of the Chinese Auto market.
China has been the largest auto market since 2009 when Chinese car buyers became more
value-oriented compared to buyers in other countries such as UK, Germany and U.S. The
automakers especially Audi, BMW and Mercedez- Benz sold a total of 21.1 million cars, which
was a 7.3% increase from the sales in 2014. However, the growth of the Chinese auto market had
was 16% and 10% in 2013 and 2014 respectively, which implies that the auto market for luxury
cars slightly deteriorated in 2015. The deceleration in the country?s market growth may be
attributed to economic recession and the changing attitudes as well as behavior towards the
purchase of luxury cars. A study conducted by McKinsey on 4,000 car owners indicated that Chinese Auto Market 3 unlike in the previous years when car ownership was perceived as a symbols of class and status,
Chinese car buyers have become less status-conscious when buying cars. The drop in the market
for luxury cars in 2015 may also be attributed to the move by most Chinese people to purchase
second-hand cars, rely on e-hailing services, lease cars and adoption of car sharing services
(Zhao & Lv, 2009).
The Chinese car market is mainly composed of luxury car models compared to other
countries in Europe and the United States. Although the market is the largest in the word, it has
been monopolized by few companies including Mercedes-Benz, Audi and BMW, which is
evident from the Beijing streets that are flooded with car models from these companies.
Consequently, the competition in the auto market is lower compared to other countries, which
increases the cost of the luxury cars. Another factor that may be elevating prices of the luxury
cars in the Chinese market are the policy factors and the unfavorable customs duties. For
instance China imposes a 17% VAT, 26% customs duty and 30% consumption tax on the
production, purchase and ownership of luxury cars. According BMW dealers in China, BMW
cars made in China are much expensive than those manufactured and sold in U.S markets
(Fetscherin & Sardy, 2008). Thus, overpricing of the cars is one of the key drivers of the
diminishing auto market in China.
Although the Chinese auto market deteriorated in 2015, the growth is likely to accelerate
in 2016 by at least 8% as indicated by a 7.7% growth during the first quarter of 2016. The
initiatives by the Chinese government to offer tax breaks and tax reliefs on smaller capacity
engine cars will revive the auto sales casing a further increase in the country?s auto market.
Although the Chinese auto market is almost monopolized by BMW, Audi and Mercedes-Benz, Chinese Auto Market 4 there are other brands from which car buyers can choose from depending on their budget. By
May 2016, Chinese market had over 130 brands of passenger vehicles, which is the largest brand
portfolio on any auto market around the world (Gao, 2002) Chinese Auto Market
Zhao, Z., & Lv, Z. (2009). Global supply chain and the Chinese auto industry.Chinese
Economy, 42(6), 27-44.
Gao, P. (2002). A tune-up for China's auto industry. The McKinsey Quarterly, 144-156.
Fetscherin, M., & Sardy, M. (2008). China shifts into gear in the global auto
market. Globalization of Chinese Enterprises, New York: Palgrave MacMillan, 181-193.
Calabrese, G. (Ed.). (2016). The greening of the automotive industry. Springer. 5
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