12.18.2013

In China, hybrids can't seem to sell without a lustrous nameplate

Nikkei Asian Review, December 19, 2013


A Lexus ES300h on display at a dealership in Shanghai.(Mark Andrews)


SHANGHAI -- Hybrid cars haven't been a big hit in China.
   
Shanghai rolled out 350 Buick LaCrosse Hybrids for use as taxis for the green-themed World Expo in 2010, but the cars disappeared soon after the exhibition ended.

Toyota infamously sold only one of its world-leading Prius models in China during the same year.

Sales of the utilitarian Prius have rebounded slightly but are still slow. Imported Honda gasoline-electric cars, meanwhile, have been faring worse.

Hybrids, however, are making inroads at the premium end of China's car market.

Toyota's luxury Lexus division is on track to sell close to 20,000 hybrids in China in 2013. Last year, it unloaded 16,000 of the things, leaving Prius sales way behind at 2,434.

Lexus last month pointedly unveiled the revamped CT200h model at the Guangzhou Auto Show rather than at shows going on at the same time in Tokyo and Los Angeles. Mercedes is also finding a welcome for its hybrid S-class sedans, though it isn't giving out figures.

"It is easy to sell these cars," a sales manager at a Shanghai Lexus dealership said, gesturing at the CT200h hybrid and other models. "We firstly emphasize the six-year warranty and secondly that it saves fuel."

Indeed, fuel economy has not been a strong selling point in China, where most car buyers are first-time purchasers.

Said Boni Sa, an automotive analyst at consultancy IHS Automotive: "For these first-time buyers, they have more to consider, like brand, vehicle size, features or safety. In an emerging market like China, to spend money on a better brand or larger model is much more reasonable than spending money on better fuel consumption."

Price is a key factor even for repeat buyers. In Chengdu, where the Prius is produced, businessman Jimi He recently bought his third car, a Volkswagen Tiguan crossover.

"I'd love a hybrid," He said. "It is more environment-friendly and more energy-saving. However, the price is the key issue that stops me from getting one."

The argument that buyers will recoup the higher upfront cost of a hybrid through fuel savings is not so convincing in China. To recover the 12,000 yuan ($1,976) price premium on the hybrid version of SAIC Motor's locally developed Roewe 750 sedan, for example, would require driving the car at least 100,000 kilometers.

Some automakers had campaigned for Beijing to begin subsidizing gas-electric hybrid purchases this year. They argued this could be more effective in addressing pollution concerns than the government's generous subsidies for pure electric cars and plug-in hybrids, which have not generated significant sales. Instead, China in September renewed the existing subsidies.

So the carmakers are finding other ways to close the price gap. Toyota announced at the Guangzhou show that it will localize production of batteries and hybrid motors for the Prius and Camry Hybrid. These components are now imported and slapped with high duties. As it stands, for the price of a Prius, a Chinese buyer can get a much larger family car.

This is why hybrids are attracting buyers for whom price is less of an issue.

"Some customers are buying a Lexus SUV or a Mercedes-Benz S-class rather than hybrid vehicles," Sa said. "Hybrids' inflated costs can be ignored by these customers."
   
At the premium end, hybrids can be positioned as high-tech and top-of-the-range rather than fuel-saving and environmentally friendly.
   
A new Mercedes E400 hybrid is to offer a more powerful engine with better acceleration than that of the standard model.
   
"Premium carmakers have a higher chance of success in the area of hybrid vehicles, mainly because premium autos are not purchased by price-sensitive consumers" said Bill Russo, president and chief executive of automotive consultancy Synergistics in Beijing. "It is still a small market but will grow as more automakers slowly introduce more models."
   
The long wheel-base E-class Mercedes will be the first premium hybrid to be produced in China. Infiniti is set to begin producing cars in China 2014, and Lexus is a possibility.

Click here to read the article at asia.nikkei.com

1 comment:

  1. INTERNATIONAL CONCEPT OF WORK FROM HOME
    Work from home theory is fast gaining popularity because of the freedom and flexibility that comes with it. Since one is not bound by fixed working hours, they can schedule their work at the time when they feel most productive and convenient to them. Women & Men benefit a lot from this concept of work since they can balance their home and work perfectly. People mostly find that in this situation, their productivity is higher and stress levels lower. Those who like isolation and a tranquil work environment also tend to prefer this way of working. Today, with the kind of communication networks available, millions of people worldwide are considering this option.

    Women & Men who want to be independent but cannot afford to leave their responsibilities at home aside will benefit a lot from this concept of work. It makes it easier to maintain a healthy balance between home and work. The family doesn't get neglected and you can get your work done too. You can thus effectively juggle home responsibilities with your career. Working from home is definitely a viable option but it also needs a lot of hard work and discipline. You have to make a time schedule for yourself and stick to it. There will be a time frame of course for any job you take up and you have to fulfill that project within that time frame.

    There are many things that can be done working from home. A few of them is listed below that will give you a general idea about the benefits of this concept.

    Baby-sitting
    This is the most common and highly preferred job that Women & Men like doing. Since in today's competitive world both the parents have to work they need a secure place to leave behind their children who will take care of them and parents can also relax without being worried all the time. In this job you don't require any degree or qualifications. You only have to know how to take care of children. Parents are happy to pay handsome salary and you can also earn a lot without putting too much of an effort.

    Nursery
    For those who have a garden or an open space at your disposal and are also interested in gardening can go for this method of earning money. If given proper time and efforts nursery business can flourish very well and you will earn handsomely. But just as all jobs establishing it will be a bit difficult but the end results are outstanding.

    Freelance
    Freelance can be in different wings. Either you can be a freelance reporter or a freelance photographer. You can also do designing or be in the advertising field doing project on your own. Being independent and working independently will depend on your field of work and the availability of its worth in the market. If you like doing jewellery designing you can do that at home totally independently. You can also work on freelancing as a marketing executive working from home. Wanna know more, email us on workfromhome.otr214422@gmail.com and we will send you information on how you can actually work as a marketing freelancer.


    Internet related work
    This is a very vast field and here sky is the limit. All you need is a computer and Internet facility. Whatever field you are into work at home is perfect match in the software field. You can match your time according to your convenience and complete whatever projects you get. To learn more about how to work from home, contact us today on workfromhome.otr214422@gmail.comand our team will get you started on some excellent work from home projects.


    Diet food
    Since now a days Women & Men are more conscious of the food that they eat hence they prefer to have homemade low cal food and if you can start supplying low cal food to various offices then it will be a very good source of income and not too much of efforts. You can hire a few ladies who will help you out and this can be a good business.

    Thus think over this concept and go ahead.

    ReplyDelete