The Guangzhou Auto Show, held in November 2009 in Guangzhou of Guangdong Province, tells revealing tales of the booming car market in southern China as well as the increasingly fierce competition between global and local makes.

Preliminary statistics show that Japanese makes together command about 70% of the southern China car market, compared to less than 30% of all major European and American counterparts. A senior manager of FAW Toyota Motor Sales Co., Ltd. says that southern China is the most mature regional market in China, where the lion’s share of his company’s sales are sealed. At the Guangzhou car show, FAW Toyota showcased 17 vehicles from its 12 model series.

Guangzhou is clearly a critical market for Toyota, where one of five new cars sold comes from the pre-recall world’s largest carmaker, who now trails Ford and GM according to recent reports. So Toyota dominates with little competition in the city or even the whole southern China. In the first half of 2009, Toyota’s share of the new car segment was 17.25%, making it the leader despite the global recession that mired many carmakers in the red. .

Industry experts say that Toyota had solidified its brand image in the early years by promoting better air-conditioners and durability, the latter of which has long been Toyota’s hallmark. Careful owners can still be seen driving 20-year-old Toyotas in Thailand and California. So this venerable Japanese make has been leading markets in Guangzhou, Shenzhen, Foshan, and Dongguan of Guangdong Province, the four most important southern Chinese cities in car sales. In fact sales of Toyotas in southern China often accounts for one-third of all Toyotas sold in China in recent years, a trend that held even in 2008, when the global crash occurred after the first quarter, without sapping Toyota’s sales of about 400,000 vehicles that year.



More Knowledgeable
Consumers in the earliest-developed automobile market in China seem more knowledgeable about products, especially in terms of cost/performance (C/P) value. Nearly two-thirds of potential new-car buyers in Guangzhou and Shenzhen look more closely at models priced between US$16,258 and US$43,941, or the most competitive range between A and B lines. Compared to buyers in Beijing, consumers in the two southern Chinese cities generally are not attracted to the A0-class and indigenous models priced between US$8,833 and US$16,110, perhaps showing southern-China new-car buyers to be more affluent and ostentatious. Such trend is clearly confirmed by the fact that demand for luxury cars in southern China priced beyond US$43,935 exceeds that for models priced under US$8,787.


Second-car Prone
Results from a survey conducted in the second half of 2008 show that consumers in the first-tier cities in southern China, including Guangzhou, Shenzhen, Dongguan etc., have higher willingness to buy second or third cars than counterparts in Beijing, Shanghai and Chengdu (Sichuang Province), with the southern-China buyers also targeting higher-end models. Furthermore and compared to booming car markets in other provinces as Shandong, more cars in the mid-to-high-end range are sold in Guangdong. Such phenomenon likely shows that southern-China consumers have had more time to accumulate wealth and sharpen taste for cars since market liberalization than their countrymen in other parts.

As global automakers pick up the pieces after the 2008 meltdown, southern China undoubtedly has become a major battlefield in China, whose car market sped past that in the USA to lead the world in 2009 with new cars sold totaling 13.6 million. The jostling and promotions by the exhibitors at the 2009 Guangzhou Auto Show only confirmed the pivotal influence of the region.
(by Quincy Liang)