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Consumer demand rising in Chinese lower-tier cities

Source: | Date: Nov. 23

  • Roland Berger, a global strategy consulting firm headquartered in Munich, recently released a report on the analysis of China's vehicle consumption in 2015. The report shows that the consumer demand for automobiles is continuously rising in Chinese lower-tier cities, which are also known as the fourth- and fifth- tier cities in this country. In addition, Chinese indigenous brands represent noticeable growth in market share while all other foreign brands (expect that Japanese brands' market share remain unchanged) have suffered declines in their market shares.

  • Among various market segments, the sales of low-end SUVs that are priced below RMB 120,000 are growing rapidly while ioint venture brands have dominated the market where automobiles that are pricedRMB 180,000. In the market where vehicles are priced between RMB 120,000 and RMB 180,000, both local and joint venture brands are striving to expand their market by promoting SUVs.

  • It is the rapidly growing consumer demand that has driven up sales of local auto brands in the lower-tier cities. These cities have not only become the only region that reports growth in the automotive market share in China, but also have contributed more than 50% to China's combined auto sales.

  • Although auto consumers in low-tier cities prioritize value for money when they purchase vehicles, they have contributed to the growth in sales of vehicles that are pricedRMB 180,000.