China: SUVs could lift domestic automakers to challenge foreign brands image

The Asian country is the world’s largest single auto market and as such every major automaker is battling for supremacy there, quickly offsetting the numerous local Chinese carmakers.

But there’s a growing sign the domestic producers have finally found a zone where they can rise to meet the challenge after constantly losing market share in recent years. The SUV segment just a couple of years ago only had one Chinese model in the top ten. After the first quarter of 2015 the tally has soared to eight. Local carmakers usually faltered in their desire to fight foreign brands even as they were treated to preferential government policies, including the need for global companies to establish joint ventures with local producers and split the profits. Foreign automakers such as Volkswagen AG and General Motors have taken the reigns in the traditional sedan segment, for example. But recent global developments, including consume trends, have brought the battle towards the more practical sport utility/crossover segment, where Chinese automakers seem to have more success today.

Analysts and industry insiders believe the Chinese automakers might find a level playing field in the rapidly advancing domestic SUV market – also mainly because companies such as BYD, Great Wall, Geely and other indigenous producers have finally invested massively in technology, quality and service. Sales at the retail level last year jumped at least a third to 3.82 million units as Chinese drivers find wealth and are now limited to just one car purchase in crowded and polluted metropolis, thus usually choosing a bigger vehicle.

Via Reuters