Re: Randy Thatcher question - Saab General Bulletin Board - Saabnet.com
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Re: Randy Thatcher question
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Posted by Randy Thatcher [Email] (#22) [Profile/Gallery] (more from Randy Thatcher) on Wed, 5 Nov 2003 21:20:29 Share Post by Email
In Reply to: Randy Thatcher question, phred, Wed, 5 Nov 2003 11:51:15
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I don't know a thing about India, but I can give a few opinions on my perception of China...

In any society there are rich and poor people. China is beginning to become more capitalist in terms of industry and production. I see the current rich people as government officials (go figure), and the growth in wealth will be certain people near the top in their businesses (offices, banks, plants, etc.) Now, as a percentage, the number of rich people a low (but growing) number. Multiply a low percentage by over a billion people, and you have a significant car market.

A few others...

There's a huge market for taxis. Currently they use a lot of VW Santanas f
for this.

Business people sometimes get company cars to call on customers. The Buick Regal is a popular car for this (built by Shanghai GM). Audi A6 is also popular.

Here's the kicker... If you can afford a car, you can afford a NICE car. So Audi got in early and built a plant (Joint Venture) for the A6. They're everywhere. I also saw a LOT of BMW 7 series and MB S-Class.

Why are they looking to build plants there? All imported cars are HEAVILY taxed. For a mfr, it's far better to do a JV and build in China, so now many companies are fighting to get in an get market share. Workers get paid a pittance, and car sale prices are similar to the west. So profit margins per vehicle are HUGE compared to those built in Europe, North America, or Japan.

Randy

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