Over the past ten years, China’s mechanical sector has experienced a revolution, from producing standard Western replicas to producing automobiles that are on par with the best in the world. China produces them in sizable amounts as the world’s largest producer.
Nevertheless, Chinese cars are facing problems in finding consumers in Europe. Transported cars, many of which are Chinese electric cars, are piling up at European ports, with some saving up to 18 months in switch vehicle gardens as companies struggle to find them onto people’s roads.
Why is this, while? Particularly in China, electric cars are receiving good testimonials. Having driven them myself, I may speak that they match or perhaps reach the well- known Western brands in variety, quality and technology.
However, it can be challenging to enter an organized business. Chinese makers will have to contend with consumer apprehension, a lack of product picture, trade protectionism and swift outdatedness.
Lack of consumer trust
Similar techniques were made by Japan in the 1960s and 1970s by China’s development plan for the automotive industry.
At that time, the merchandise coming from Japan was remarkable but lacked the elegance, style and longevity of European counterparts. In contrast to the stylish Western designs, Japanese cars were perceived as thin, weak, prone to rust, and as being very generic.
Customers (especially Americans ), who were slower to accept the country that launched the Pearl Harbor problems, recalls Japan’s role in World War II as well.
But, by continually focusing on a reliable, relatively inexpensive and extremely fashionable product, Japan gently turned this around to become the mechanical powerhouse of the 1990s and 2000s.
Many Westerners are suspicious of China, and its automakers are similarly hampered by their recent trend of producing both endorsed and illegal copies of European vehicles. However, Chinese cars are rapidly improving to match and surpass current models thanks to the lessons the Japanese can draw.
Through its strategic purchases of brands like Volvo, Lotus, and MG, China has also established brands that are well-known and, more importantly, possess some of the world’s best engineering knowledge.
However, Chinese automakers have shown that they are unable to win customers from existing customers of brands like BMW, Porsche, Ferrari, and Ford even after buying up Western brands. For these buyers, Chinese makers, like the Japanese, will have to build up the brand’s history in terms of known reliability and even things like motorsport success over time.
It was Ford dealers who, in the 1960s, coined the phrase:” Win on Sunday, sell on Monday”. The proverb is used to support the idea that if buyers see a car winning a race, they’ll be inspired to go out and buy one.
Existing manufacturers also have a history of reliability that customers have personally experienced, which greatly enhances brand loyalty. Add to this a lack of a well-established dealer network outside of China, and you can see how Chinese manufacturers fight off the established competition.
Challenging trade environment
China has a price advantage when compared to the US or Europe. Chinese cars are less expensive to both make and buy thanks to economies of scale, excellent shipping links, and cheap labor.
However, in many countries they are subject to high import tariffs. Each car imported into the EU currently imposes a 10 % import tariff. And in the US, car imports from China are subject to a 27.5 % tariff.
These tariffs may well rise higher. The EU is looking into whether its tariff is too low. Later this year, higher duties will be applied retroactively to imported cars if it determines this to be the case.
Cars are also in a development stage where they see quick updates and updates, specifically electric ones.
Traditionally, vehicle models would see a market life of between four and seven years, perhaps with small updates in trim, color palette or feature availability. Tesla has, however, turned this around.
For instance, the Tesla Model S has been subject to almost constant product updates, making it hardly recognisable in terms of hardware when compared to a vehicle from 2012 on. Chinese automakers have taken note. They release new models about 30 % more quickly than the majority of their counterparts in most other countries.
Tesla is supporting owners of older cars with upgrades, at extra expense, to bring them in line with the latest hardware. The rate at which Chinese automakers are releasing new models could make buyers wary that the product they have purchased will soon become outdated compared to purchasing a car on a more traditional update cycle because of this software support.
Many of these problems can be resolved. They also address private buyers, who are more interested in costs, than business buyers. Chinese manufacturers would be wise to exert greater pressure on this market.
The situation is similar elsewhere in Europe, and the fleet market is a big player in the UK. Selling en masse to rental companies and fleets puts more cars on the road and provides more reliability data to be able to be incorporated into the market.
At Anglia Ruskin University, Tom Stacey, a senior lecturer in operations and supply chain management.
This article was republished from The Conversation under a Creative Commons license. Read the original article.