SAIC fires shot in car price war
Shanghai Automotive Industry Corp (SAIC), China's largest carmaker, has cut the prices of two models made with partner General Motors Corp by between 6 and 10 per cent in a push to increase its share of the mid-range market.
The Chevrolet Lova and Aveo are being sold for 5,000 to 9,900 yuan less than the previous prices of 80,000 to 100,000 yuan.
The cuts are a way to raise brand reputation and increase the models' competitiveness in a particular segment of the market, according to a Shanghai GM press release.
The Chevrolet series has been available in the country for two years and 190,000 units have been sold.
Shanghai GM sold 413,367 cars in the country last year, up from 325,429 in 2005.
SAIC rivals also plan to make price cuts on some models before the end of next month, with customers set to receive 10,000 yuan savings on Elantras, made by Beijing Hyundai, Civics from Dongfeng Honda, and Accords from Guangzhou Honda.
As mainland carmakers compete for market share, prices would continue to fall by 3 to 5 per cent annually, said analyst Alex Fan of Daiwa Institute.
Shanghai GM, challenged by a large multinational competitor - Volkswagen - in its home city, cut the price of its medium to high-end Regal and Espica models by as much as 10 per cent early last year.
Volkswagen is expected to announce soon that it achieved its sales target of 600,000 units for last year.
Latecomer to the Chinese market Ford Motor, which formed the Changan-Ford-Mazda alliance, said yesterday its sales in the mainland last year doubled to 129,790 units on demand for its Fiesta compacts, Focus and Mondeo.
Ford, which had about 2 per cent market share in 2005, is introducing more models and offering discounts to catch its rivals.
