Friday, November 22, 2013

Rivals Aim to Break German Hold on China Luxury-Car Market

The article in question is “Rivals Aim to Break German Hold on China Luxury-Car Market” which was published on November 2013. Its author – Colum Murphy – describes the current state of affairs of the leading automakers on the Chinese market. The thing is that Chinese consumers prefer to buy German cars from the companies like Audi, BMW and Daimler. In fact, those three companies hold 70% of the Chinese luxury-car market. However, in the recent years several less popular companies like General Motors and Tata Motors decided to take their share of that market. Experts say that a fierce competition is about to begin since Chinese market tends to grow even more in future. The only, but serious negative aspect about Chinese market is that it is greatly influenced by the government. The latter does not approve the desire of its people to spend excessive sums of money on luxury products for the sake of a mere show off. That is why all the car makers had to come up with a respond to the mentioned governmental policy and that is why Volvo company which now belongs to Chinese businessmen thinks that it will have the upper hand, because their products are not that “flashy” as their competitors propose.

This particular news is interesting for many reasons, but the most important one connected with the fact that I want to see whether Chinese government will remain “loyal” to the principles of market liberalization and whether it will forcefully exclude foreign businesses from its soil in order to support its own. The application of this article to other businesses is clear – it gives a hint concerning the future trends on the Chinese market in particular and on the global in general. Since China has one of the biggest and most promising economies in the world everything that relates to its national market inevitably affects the global economy, especially in a modern highly globalized and interdependent world.

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