With monthly car sales in China having overtaken those in the US, Ford’s decision to shift its regional focus to the market is a timely one. The company is expected to transfer its Asian marketing headquarters from Thailand to China by the end of the year in order to focus on the growing market and its joint venture partners Chang’an Motors and Jiangling Auto.
As the world’s second-largest vehicle market, China, and indeed the region as a whole, will be vital in keeping the ailing Detroit auto industry afloat. But while Asia offers greater potential for growth than the US market, brands such as Ford, General Motors (GM) and Chrysler continue to face a stiff challenge in the region.
According to Matthew Godfrey, Publicis’ Asia CEO, the change in focus comes late in the day. “Apart from Shanghai GM [the market leader in China], I don’t think US brands have ever done a great job of cracking Asia,” he says, pointing out that while Japanese brands have demonstrated a consistently strong presence, their US counterparts have not. “Their bread and butter volume has always been in the US. They’ve never really paid much attention to China or Asia, but now we’re going to see more investment than ever before.”
Yet how much investment North American firms are able to make given the situation at home remains to be seen. Observers suggest a considerable amount needs to be invested in basic brand building, particularly by GM and Chrysler, which are not regarded as brands in their own right. John Zeigler, chief executive of DDB Asia-Pacific, sees the current positioning as being overly built on features, rather than personality.
Although Ford, whose marques in China are primarily German-designed with the Asian market in mind, has cultivated an enthusiastic following for the Focus, the potential for growth from other models such as the Fiesta and the Mondeo is questionable. Georgia Zhuang, associate director of automotive research at Nielsen China, points to over-reliance on the Focus, at the expense of following evolving consumer demands.
Zhuang states that product planning, along with pricing strategy, are top priorities if US manufacturers are to harness the potential of the China market and remain competitive against continually developing Japanese, Korean and even domestic rivals.
With China hit by the downturn, Zhuang says consumer decision-making is set to “become more complicated” and that the majority of buyers will head towards more economical models over the coming year. Outside China, India, and to an extent Indonesia, remain key markets for expansion, although as Godfrey points out, the development of green, and most importantly cheap, models is essential to achieve any presence in India.
The unveiling by GM of the Chevrolet Volt, a plug-in hybrid, is encouraging. Chris Iki, global account director for Nissan at TBWAHakuhodo, sees this as a sign that US companies have a chance to catch up with more economical, technologically advanced competitors.
“The image of US cars is not supreme,” he says. “But there is an opportunity for them to make up what they’ve lost. The entire world is going electric and anyone who tries to go the other way will not succeed. The US may as well get on the bandwagon.”
Got a view?
E-mail [email protected]
As the world’s second-largest vehicle market, China, and indeed the region as a whole, will be vital in keeping the ailing Detroit auto industry afloat. But while Asia offers greater potential for growth than the US market, brands such as Ford, General Motors (GM) and Chrysler continue to face a stiff challenge in the region.
According to Matthew Godfrey, Publicis’ Asia CEO, the change in focus comes late in the day. “Apart from Shanghai GM [the market leader in China], I don’t think US brands have ever done a great job of cracking Asia,” he says, pointing out that while Japanese brands have demonstrated a consistently strong presence, their US counterparts have not. “Their bread and butter volume has always been in the US. They’ve never really paid much attention to China or Asia, but now we’re going to see more investment than ever before.”
Yet how much investment North American firms are able to make given the situation at home remains to be seen. Observers suggest a considerable amount needs to be invested in basic brand building, particularly by GM and Chrysler, which are not regarded as brands in their own right. John Zeigler, chief executive of DDB Asia-Pacific, sees the current positioning as being overly built on features, rather than personality.
Although Ford, whose marques in China are primarily German-designed with the Asian market in mind, has cultivated an enthusiastic following for the Focus, the potential for growth from other models such as the Fiesta and the Mondeo is questionable. Georgia Zhuang, associate director of automotive research at Nielsen China, points to over-reliance on the Focus, at the expense of following evolving consumer demands.
Zhuang states that product planning, along with pricing strategy, are top priorities if US manufacturers are to harness the potential of the China market and remain competitive against continually developing Japanese, Korean and even domestic rivals.
With China hit by the downturn, Zhuang says consumer decision-making is set to “become more complicated” and that the majority of buyers will head towards more economical models over the coming year. Outside China, India, and to an extent Indonesia, remain key markets for expansion, although as Godfrey points out, the development of green, and most importantly cheap, models is essential to achieve any presence in India.
The unveiling by GM of the Chevrolet Volt, a plug-in hybrid, is encouraging. Chris Iki, global account director for Nissan at TBWAHakuhodo, sees this as a sign that US companies have a chance to catch up with more economical, technologically advanced competitors.
“The image of US cars is not supreme,” he says. “But there is an opportunity for them to make up what they’ve lost. The entire world is going electric and anyone who tries to go the other way will not succeed. The US may as well get on the bandwagon.”
Got a view?
E-mail [email protected]