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11. September 2007

From China Competition Arises For European Car Manufacturers

Accenture survey reveals that many German car drivers are interested in Chinese cars

Every fourth German could imagine buying a Chinese car (25 percent) according to a survey conducted by global management consulting, technology services and outsourcing company Accenture. 28 percent of driver license holders believe that Chinese car companies will be just as successful as Korean manufacturers in Germany within the next five years.

Competition Expected in Low to Mid Price Range Vehicle and passenger safety would be the most important criteria for 63 percent of respondents when purchasing a Chinese car. For almost every second driver (48 percent) price would be the decisive factor, expectedly the greatest advantage of Chinese manufacturers.

According to Andreas Baier, senior executive at Accenture’s Automotive practice: “From 2009 onwards, Chinese manufacturers will try to bring new models to the German market. By then, they will most likely have done their homework regarding safety standards and could trouble seriousely competitors, mainly in the low to mid price segment.”

In the past , Chinese car manufacturers have attempted twice to enter the important German automotive market, 2005 with the “Landwind” SUV and 2007 with the limousine “Brilliance”. In both cases, the results of security tests lead to a withdrawal.

Established Manufacturers Should Use Grace Period Even so - “The grace period, until Chinese cars will become a competitor on the German market, is shorter than many manufacturers believe”, says Andreas Baier. “However, they still have a range of opportunities to strengthen their position.” Their biggest advantage is their significantly higher brand awareness. Only 2 percent of German drivers know “Geely”, a Chinese manufacturer , announcing recently they would market two models in Germany in 2009.

Baier views knowledge of the market as another distinct advantage. “Most manufacturers have been operating here for a long time and know the market structures and consumers. In part, they have a much differentiated picture of what customers expect from their brands.” But this knowledge is definitely still expandable, Andreas Baier says.

Survey highlights include: Chinese cars must become more much for eco-friendly . The third most important criteria for purchasing Chinese cars are their environmental compatibility (46 percent). Design (11 percent), engine performance (9 percent) and brand image (2 percent) hardly are of importance for the majority of consumers.

Chinese cars are largely unknown. While 12 percent of respondents know the “Landwind”, only 9 percent of German car drivers have heard of the “Chery” or “Brilliance”. With a brand awareness of only 2 percent, “Geely” comes in a distant last.

Methodology On behalf of Accenture, TNS Infratest surveyed 1,268 driver license holders in Germany during July 2007.

About Accenture Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With more than 162,000 people in 49 countries, the company generated net revenues of US$16.65 billion for the fiscal year ended Aug. 31, 2006. Its home page is Öffnet einen externen Link in einem neuen Fensterwww.accenture.com.

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