China may still be the promised land for global auto makers but competition is set to reach new heights in coming years as consumers start buying cars for a second or third time and are more swayed by brand loyalty.

About four out of five new cars are sold to first-time buyers in China today, making the country a uniquely level playing ground for the 30-plus brands vying for a slice of the world's second-biggest auto market.

With passenger car sales expected to jump 18 percent this year to 4.7 million units and to 7 million by 2010, China offers some of the most promising growth opportunities for auto makers.

Volkswagen AG, until last year the country's top foreign brand, sells more cars in China than it does at home in Germany. For many others, China is their single most important market as demand tapers off in the mature markets of the West.

Some brands could already be in the danger zone. Keen to chase market share or scrambling to fill underused factory space after excessive expansion, companies such as Volkswagen, Hyundai Motor Co. and General Motors Corp. have at some point relied more than others on lower price tags to move the metal.

Pressure to reduce prices has also come from local Chinese brands such as Chery Automobile and Geely Automobile Holdings, which have undercut their foreign rivals significantly, albeit at lower technological and quality levels.

Global car makers say they compete in a separate segment of the market from local brands, which have so far offered mainly no-frills bargains. But that's also changing as some homegrown brands -- notably Chery, Geely and Brilliance Automotive-- step up their game by adopting European designs and technologies.

Full coverage even state-owned companies with foreign partners such as FAW Car Co. and SAIC Motor Corp. have begun offering cars under their own brands -- in FAW's case a car based on Mazda Motor Corp.'s Mazda6 sedan, but 20 percent cheaper.

Source:佚名