CAMBRIDGE: China’s automotive industry has revolutionised over the past decade, from producing basic Western clones to making cars that equal the world’s best. As the manufacturing powerhouse of the world, China is also producing them in huge volumes.
But entering an established market as a challenger is a complex operation. Chinese makers will have to contend with buyer wariness, a lack of brand image, trade protectionism and rapid outdatedness.China’s automotive expansion programme draws parallels with the moves made by Japan in the 1960s and 70s. At that time, the product coming from Japan was commendable but lacked the finesse, design and longevity of their Western counterparts.
Yet, even after buying up Western brands, Chinese automakers have proven unable to buy loyalty from existing customers of brands like BMW, Porsche, Ferrari and Ford. For these buyers, the history of the brand in terms of known reliability and even things like motor sport success is something that Chinese makers, like the Japanese, will have to build up over time.
However, in many countries they are subject to high import tariffs. The European Union currently imposes a 10 per cent import tariff on each car brought in. And in the US, President Joe Biden on Tuesday announced aThese tariffs may well rise further. The EU is conducting an investigation into whether its tariff is too low. If it concludes this later this year, higher duties will be applied retrospectively to imported cars.
Tesla is supporting owners of older cars with upgrades, at extra expense, to bring them in line with the latest hardware. Without guaranteed software support like this, the rate at which Chinese automakers are bringing out new models could make buyers wary that the product they have bought will soon become outdated compared to buying a car on a more traditional update cycle.HOW TO SUCCEED
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