Market share of A0 and A00-class declined

　　Recently, Suzuki Motor said it would produce 1.0-1.1L models in China in 2011. But in fact, it may be a mistake for Suzuki to attach such importance to Chinese market, especially the small displacement car market. For the time being, though there are national supportive policies, models with the displacement lower than 1.3L are being marginalized in China.

　　Data: Declining year by year in five consecutive years

　　The development of China auto market is envied by the whole world. However, different from the trend in other markets small displacement cars are more favorable, in China the A00-class and A0-class markets are not developing as the expansion of the entire market. Data show that from 2005, A0 and A00-level market has been gradually shrinking, while A0-class models, in particular those with displacement lower than 1.3L have gradually being marginalized.

　　According to data released by Passenger Vehicle Association, from 2005 to 2008, the share of China A0 and A00-class market was respectively 38.1%, 36.2%, 32.4% and 29.7%. Until 2009, the market share finally got stable at 22.8%, which was exactly benefiting from the relevant government subsidies. After entering the year 2010, A0-class market especially lower than 1.3L models, continued to decline. Till the ending of the first half, the market share dropped to 21.6%. Based on current market conditions, the market still has a downward trend.

　　Market: Consumer culture constraints small-displacement

　　“Presently, the key reason A0-class market sales performance is inversely proportional to the development of China auto market lies in the concept of consumption.” Automobile industry source said. It is reported that the national culture “big is beautiful” has formed a consumer characteristics that it is better to purchase big cars other than small ones. At present consumers tend to buy more spacious and comfortable cars. As to the power, their requirements are largely different, which has also formed varied grades within the A Class level and the popularity in private consumers of B-class cars.

　　It can be said that A0-level models are more a means of transportation. Since the auto consumption in China is propped up by family units, A0-class models with smaller space can not win the favor of consumers. Moreover, in terms of price, as the prices of A-Class models are gradually being lowered down, the price gap between traditional A-class and A0-class models is being gradually reduced. Cui Dongshu, Deputy Secretary-General of Passenger Vehicle Association the co-existed trends of constant falling car prices and the rising purchasing power of consumers promotes the upgrading of car levels and directly leads to the marginalization of A0-class models.

　　In addition, at the early stage, for low profits and technological backwardness, consumers are worried about safety and quality of low-emission vehicles. Later, as new models launched like mushrooms after rain, consumers will certainly choose to purchase larger A-class cars which are also priced low.

　　Policy: Policy restricting the development of A0 Class

　　Though the State has continued to encourage the low-emission vehicle to achieve energy conservation, the recently issued policies seem more conducive to A-class car. The “energy saving car subsidy” especially more causes the small cars to be marginalized.

　　Cui Dongshu representation, the principle of energy-saving vehicles subsidies is based on whether the fuel consumption reaches the standard according to vehicle weight. Large cars with small engines have obvious advantages, which is very general within A-class car market currently but more difficult to be achieved by small displacement A0-class cars.

　　Similarly, in terms of the tax, A0-class models are not much advantage. Cui Dongshu said that the current tax policy system is linked with the displacement. From the current perspective, A00-Class models are most one liter displacement while A0-Class 1.5-liter. The JV brands A-Class models are mostly 1.6 liter displacement while independent brand A-Class 1.5-liter. A0 and A-Class cars have no big difference on the tax. Similarly, the future Vehicle and Ship Tax may be depended on displacements of travel tax policy also has a small tax gap between small cars and compact cars. Therefore, the compact cars will be more popular since they are cheaper and more comfortable.

　　So far, the policies at early stage will focus on encouraging compact car all along. If there is no effective change, the trend of marginalization of small cars will continue absolutely.

　　(Translator: Yalong/Jessie)

　　See original Chinese report Please click: http://shanghai.auto.sohu.com/20100730/n273872217.shtml