Five percent represents about 800,000 units.
Mavel bases its outlook on several points: In 10 years, the Chinese will have improved quality and will be able to sell some models at low prices. The Japanese have about 15 percent of the market share today and the Koreans about 5 percent, so ¡°one could think that the massive arrival of Chinese automakers could develop a market share of 2.5 percent to 7.5 percent in 10 years, and perhaps 10 percent in the long term.¡±
The losers in the scenario will be the companies with the most aggressive pricing for their entry-level and mid-range vehicles, predicts Mavel, i.e. companies ¡°like Fiat, Opel Ford, Renault, PSA Peugeot-Citroën and Volkswagen, and also the Koreans and Japanese.¡± Though all of them will have to give up a small part of the market, on the whole everyone should survive. The premium automakers, led by Mercedes-Benz, Audi and BMW, will not be affected.
The study, Breakthrough of Chinese vehicles in
Vehicles made in
Mavel believes the price of Chinese cars on the European market will be 10-15 percent under the price range of existing competitors. The study says, ¡°Consciously or unconsciously, price is today the No. 1 argument for products made in
The key factors for the Chinese industry are the quality of the cars, their cost of production, the strategy of the Chinese leaders, and the production capacity.
“To attack foreign markets it is indispensable for the Chinese independent automakers to robe themselves in an image of quality. Today, they are doubly handicapped, on one hand by the terrible results in several crash tests in Europe and the media attention devoted to them, and on the other hand by the general image of the Chinese industry that has been tarnished by recent scandals involving toys, clothes and food products,¡± the study went on to say.
Mavel believes that Chinese independents can overcome the problem if they strenuously make sure that every car going to
Sales of Landwinds started well but died out after a crash test in Germany, and sales of Brilliance models have been delayed at least another nine months while the company tries to improve its cars so they get more than one star in the EuroNCAP.
“Today, it is certain that quality (of independent Chinese automakers) is not acceptable,¡± says the study. ¡°The basic reason is their lack of competence¡± based on inexperience. ¡°They have not yet understood the importance of mastering certain key technologies,¡± like the use of high strength steel.
However, there is a paradox. In effect,
Mavel notes that SAIC was able to purchase up-to-date Rover technology, and because Chery is making cars for Chrysler LLC to sell in the
Mavel, whose expertise includes dismantling cars to determine their technological and material content, plans to analyze at the end of the year in
The study predicts that the Chinese cars in
Distribution in Europe will be no cheaper than that of the competitors, and the cost of shipping cars to
The study concluded, ¡°The Chinese are coming with a new spirit to the European market. They will therefore have a bigger capacity of thinking in other ways than the traditional European automakers who have a process of development based on 100 years of experience. In addition, the Chinese automaker could rely on a new generation of trained engineers, very motivated and very hard working. The Chinese additionally have access, thanks to their large country and their history, to a large pallet of resources, notably in energy and material, different than those of traditional automakers. They are going to be led to develop ¡®different¡¯ vehicles to respond to the specific needs of their national market. As a result of these constraints and opportunities, they are going to be constrained to be innovative. We predict therefore that in the next 10 years a large part of automotive innovation will come from China.¡±
Mavel SA (www.mavel.com) is located in