In China, the automotive industry are showing a rapid growth. More vehicles are sold every year than anywhere on earth. Now, China’s automotive industry is heading toward oligopoly dominated by four major companies. The four companies are Great Wall Motor Co., Volvo’s owner Geely Automobile Holdings, SAIC Motor Corp and Guang Zhou Automobile group. Now, the market share from these 4 companies are 45 to 60 percent above.
At 2006, 28 million vehicles were sold in China due to the increase of 13.7 percent. The average price of a vehicle have increased to 127,600 yuan in 2016. Due to the development of car industry, consumers are now expecting higher quality cars.
Now, Chinese business are putting their effort to increase the quality of their product. Since, consumers are willing to pay for the better service and more experienced people, it is proved that consumers are now seeking for higher quality products.
Since, the leading carmakers sales jumped 10 times in less than 20 years, China are experiencing the same situation. Now, the challenge for China’s automotive industry is the possible cancellation of the country’s tax cut policy.
Using SAIC as an example, four dominate companies have entered the stage where explosive growth have happened, China Merchant are seeing this explosive car industry as a positive view. Therefore, China Merchant predicted that the four brand will keep on dominating the market for long period of time. Thus, these four company will dominate the market share.