Price war sparked on economy cars
4/6/2003 15:29
Starting on June 1, car manufacturers slashed prices on economy cars
priced below 100,000 yuan (US$12,000), as car buyers began to turn their
attention to mid-end cars, the Jiefang Daily reported today.
The Tianjin
First Automotive Works slashed prices on Vizi, Echo and Charade 2000 models by a
maximum of 10,000 yuan (US$1,200) starting on June 1 after cutting the prices of
ten models of Charade and Golden Charade by 2,000-5,700 yuan several days
ago.
The Jili Automobile Company, Tianjin FAW's rival, slashed prices on
HQ and Ulion by 1,000-6,000 yuan, with one HQ model priced at only 35,999 yuan,
the lowest price in the domestic automobile industry.
Jerry's new QQ
model, which hit the market this month, sells at only 49,800 yuan.
Sedans priced below 100,000 yuan are not the focus in the auto market,
so car manufacturers had to cut prices on these economy cars, said an industry
analyst.
A rush of economy car purchases started at the beginning of last
year, but after two or three months, the zeal gradually faded, with many
consumers focusing on mid-end cars such as Polo, Bora and Elysee.
Some
models with higher prices such as Fengshen and Regal have also generated strong
interest from consumers.
Economy cars sell well in Beijing, but in
Shanghai and Guangdong Province their proportion of sales is small. Many car
manufacturers have begun to transfer the production of economy cars to small and
mid-size cities in the central and western part of the country.
The price
war has had little impact on the market, as some major car manufacturers such as
First Automotive Works-Volkswagen Automotive and Guangzhou Honda have no models
priced below 100,000 yuan, said the analyst.
Price wars on cars have been
triggered twice this year, with the former one sparked on mid and high-end cars
and the other on economy cars, the analyst said.
Many mid-end cars will
hit the market in July and August, so a price war in the second half of the year
is predicted for cars priced between 150,000-200,000 yuan, the analyst
said.
The price cuts on mid-end cars are expected to be larger than for
entry-level cars, ranging around 10,000-20,000 yuan, according to some local car
dealers.
Wendy Zhang/ Shanghai Daily news
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