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China, Socialism & Consumer Behavior: auto prices to fall in Q4/2008 on slowing demand

Auto prices in China were expected to fall in the fourth quarter led by slowing demand, the price monitoring center under the Chinese National Development and Reform Commission (NDRC) said in a report on recently. Prices fell 2.09 percent in the first nine months due to excessive output and oversupply of new models in the second and third quarters, it said…

Auto prices in China were expected to fall in the fourth quarter led by slowing demand, the price monitoring center under the Chinese National Development and Reform Commission (NDRC) said in a report on recently.

Prices fell 2.09 percent in the first nine months due to excessive output and oversupply of new models in the second and third quarters, it said.

Auto consumption was dampened by the rising costs of automobile use, which also contributed to the price fall.

The government has unveiled an array of policies to limit car use, including raising the auto consumption tax and traffic restrictions on motorists during the Olympics. They have dampened auto sales and prices, said industry analyst Jia Xinguang.

The report noted auto dealers would habitually cut prices at year end to reach their annual sales target and clear out inventory.

It said the competition might force auto makers to cut prices as much as 3 percent. Price cuts remain the main force to boost lackluster sales in a market where supply exceeds demand.

Slowing demand dragged down September passenger car sales by 1.44 percent from the same period last year, after August sales contracted 6.24 percent from a year earlier.

The falling sales were driven by inflation and the tumbling stock market that drained consumer cash, as Jia put it.

He predicted the spreading financial crisis would drag world car sales down 0.3 percent from the 2007 level to 58.1 million units, the first fall in eight years, as the financial crisis began to affect all business sectors and the credit squeeze restricted potential buyers.

By Itamar Medeiros

Originally from Brazil, Itamar Medeiros currently lives in Germany, where he works as VP of Design Strategy at SAP, where he leads the design vision for the entire Human Capital Management product line, ensuring cohesive product narratives and establishing best practices.

Working in the Information Technology industry since 1998, Itamar has helped truly global companies in multiple continents create great user experience through advocating Design and Innovation principles. Itamar has also served as a juror for prestigious design competitions and lectured on design topics at universities worldwide.

During his 7 years in China, he promoted the User Experience Design discipline as User Experience Manager at Autodesk and Local Coordinator of the Interaction Design Association (IxDA) in Shanghai.

Itamar holds a MA in Design Practice from Northumbria University (Newcastle, UK), for which he received a Distinction Award for his thesis Creating Innovative Design Software Solutions within Collaborative/Distributed Design Environments.

One reply on “China, Socialism & Consumer Behavior: auto prices to fall in Q4/2008 on slowing demand”

I think the problem is worldwide. With the announcement the other day that Honda are looking to sell the F1 team and Ford having to approach the US government to be bailed out. The only disappointing thing about the Ford Group approaching the government the first time was they arrived in their personal jet to claim poverty!

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