Improving Quality to Spark Greater Uptake of Chinese Vehicles in the Russian Automotive Market

LONDON--Chinese original equipment manufacturers (OEMs) have overcome a sluggish start in the Russian automotive market to account for 1.2 percent of the total passenger vehicle market in 2006. Having successfully adapted to the Russian market, Chinese OEMs can use their accrued experience about vehicles sales features, consumer perception of quality and safety and interior and exterior design to enter global markets.

New analysis from Frost & Sullivan (http://www.automotive.frost.com), Strategic Analysis of Chinese Vehicle Manufacturers in Russia: Implications for the Russian Automotive Market, estimates that the total turnover of the Chinese OEMs in Russia in 2006 was €0.20 billion. This estimated to reach €1.40 billion in 2012.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the latest strategic analysis of Chinese Vehicle Manufacturers in Russia and its implications for the Russian automotive market, send an e-mail to Vanessa Quezada, Corporate Communications at vanessa.quezada@frost.com with your full name, company name, title, telephone number, e-mail address, city, state and country. We will send you an overview via e-mail upon receipt of the above information.

“Chinese OEMs are looking forward to ramifying operations in all market segments of the Russian market,” notes Frost & Sullivan Industry Analyst Andriy Ivchenko. “Focusing initially on sports utility vehicles (SUVs) and pick-up market segments in 2005, Chinese OEMs expanded their product line and achieved considerable sales in A and C market segments in 2006.”

Chinese vehicle manufacturers score over their competitors with their low-priced products. However, because low-cost vehicles do not match the quality of their international counterparts, Chinese vehicle manufactures will have to focus on quality to maintain their advantage and continue expanding.

Chinese vehicles are also perceived to have lower safety standards, which is a huge deterrent in a market that has to constantly cater to customer demands for higher quality, reliability and safety of vehicles. Superior cost of ownership and high-quality vehicles will go a long way in helping the Chinese OEMs penetrate other segments of the Russian automotive market.

“Chinese OEMs have already demonstrated their ability to improve all aspects of their products in a very short period,” notes Ivchenko. “Local assembly of select Chinese brands in Russia will strengthen their market position and intensify competition in certain market segments.”

Chinese OEMs can also take heart from the increasing prices of Russian car models and the Russian Government’s active support of its automotive industry. They are looking to sign an agreement with the Ministry of Economic Development to obtain investment and import benefits. Moreover, the high tariffs on imported used vehicles compel consumers to buy new low-cost vehicles produced or assembled locally, boosting the market for Chinese OEMs.

Strategic Analysis of Chinese Vehicle Manufacturers in Russia: Implications for the Russian Automotive Market is part of the Automotive & Transportation Growth Partnership Service, which also includes research on the following: Overview of Central and Eastern European Automotive Markets, Evaluation of World Market Potential for LPG and CNG Vehicles and Alternative Fuel Conversion Equipment in the OE and Aftermarket, Russian End User Study for Powertrain Technologies and Features. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics and demographics. For more information, visit http://www.frost.com.

Strategic Analysis of Chinese Vehicle Manufacturers in Russia: Implications for the Russian Automotive Market

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