Beijing, December 14, 2009--- Lin Lei, Co-President and CEO of Sinotrust participated in the opening ceremony of “The 7th Sohu Auto Week” officially went online on December 14. He shared insights on the “Dialogue with Industry Leader—Chinese auto industry 2009 review and 2010 forecast”, with other renowned industry experts from Society of Automotive Engineers (SAE)-China, China Automobile Dealer Association and the Industrial and Economic Research Center of Chinese Academy of Social Sciences.
Lin Lei (first from right) shares insights with industry experts on the future of Chinese auto industry
Lin Lei pointed out that currently auto consumption is still mainly in those economically developed provinces and major cities. And the consumption power varies greatly across regions. While the auto markets in developed regions are becoming saturated, the markets in less developed regions are still immature. At the same time, the purchasing power of rural areas is still yet to be developed. All the factors result in the slowing down of auto market growth. However, the good side of the coin is that the tiered market pattern ensures the long-time existing of rigid demands of automobiles.
According to the statistics in recent years, the auto markets of Tier 3 and Tier 4 cities grow significantly faster than those of Tier 1 and Tier 2 cities. And since the economic crisis set in, the trend is becoming more and more clear. Meanwhile, consumers from different regions have different demands on automobiles due to regional economic and culture differences. As a result, the auto sales growth and brand preference vary greatly across regions.
Lin Lei also pointed out that with the rapid growth of auto sales volume, the number of dealers also witnesses a quick rise. According to the study on the number of dealers and sales volume, it is found that the license plate registration volume is closely interrelated with number of dealers. Because of the limit of sales capacity of each individual dealer and the exploration of new market, the increasing of new dealers is still the prime method to improve sales.
According Lin Lei, the second peak of distribution network development features the active participation of capital. Currently, it is the capital that drives the expansion and merger of dealer groups. Through capital operation, dealer groups are not only able to acquire local dealers, to realize relative monopoly on local market, they can also merger and acquire high-quality dealers on national scale. The moves of dealer groups will help accelerate the growth of automotive after market.
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