Reflections on China's Luxury Car: The Direction of Consumption and Policy

The business club reported on October 20th that in 2011, China's passenger vehicles have apparently experienced a deceleration in growth, but the imported car market dominated by luxury cars still maintains a relatively rapid growth momentum. In the first half of this year, the number of imported cars on the national market was 294,000, an increase of 92.5% year-on-year, and the number of high-grade imported cars above Grade C increased by 133.7% year-on-year.

It is generally believed that selling luxury cars is entirely a market factor. First, the level of economic development has increased, and the number of affluent people has grown. The number of potential car buyers has been increasing. The second is that the buying behavior of the first-tier cities in the auto market is becoming more and more frequent, and more and more luxury cars are being purchased. The third reason is that because of the reduction of luxury vehicle doors, there is no need to increase the cost of upgrading consumer demand. With the development of the Chinese automobile market, consumption upgrade has become an inevitable trend of the auto market. At present, the proportion of domestic luxury cars in the market is still relatively small, there is still much room for growth.

However, behind the "blowout" of luxury cars, our consumption direction is going against the current policy. The Chinese government gives a lot of subsidy to hundreds of vehicles that have been assessed as energy-saving each year. Isn't it just for energy conservation and environmental protection? Doesn't China's tens of thousands of yuan per car subsidy promote the rapid start of the new energy auto market? This inconsistency between the direction of consumption and current policies deserves reflection. The reason for this is that there is still a serious lack of policies to encourage products for small-displacement vehicles and products that restrict large-displacement vehicles.

Lessons learned from the lessons learned in the U.S. market. One of the reasons why the three major automobile companies in the United States have been bumpy in recent decades is the guidance of market consumers. American consumers, like today’s Chinese consumers, are greedy and foreign, and this kind of consumer tendency directly leads to the direction of technology development and product strategy of the three major American auto manufacturers. However, the rising trend of oil prices and the government’s energy saving and environmental protection The request will eventually let the three big companies lose the opportunity to keep up with the overall market development direction.

China's auto market today is like the past in the US market, and the large-displacement luxury car market has soared. If we allow this momentum to continue, how can we guarantee the safety of our oil? Where are our goals for energy conservation, emission reduction and environmental governance? Where are our solutions for traffic jams?

There is an upsurge of production and consumption of small-displacement vehicles in the U.S. market today. At present, the U.S. tradition of favoring large displacement, powerful cars is being corrected. Severe fuel consumption regulations and policies have forced all American auto companies to launch new types of small-displacement vehicles. Although consumers still want to buy large-displacement cars, policy factors have caused a reduction in production volume, which has led to a reduction in market sales. In July of this year, the market share of small displacement cars in the United States rose to 17.4%, which is the only category that achieved sales growth.

The promotion of small-displacement vehicle products is in line with the long-term interests of China's auto industry. It is time to remedy the situation.