Major Chinese automakers have reached consensus that they must shift focus to brand building from increasing export volume in Arab states, according to international business managers of major Chinese auto brands.
Chinese auto brands must export more high and medium-grade autos to the Arab states, instead of low-end vehicles, managers of major Chinese automakers said in a latest industry forum held in Yinchuan.
China's annual auto exports to the Arab states have been more than 200,000 units in the past three years, about one fourth of China's total auto export. However, Chinese autos take up a market share of less than 10 percent on the Arab market, far behind the dominant Japanese and South Korean auto brands.
Industry insiders attribute the low market share mainly to two reasons. For one thing, most Chinese auto exporters opened the Arab market with relatively low-end products, which are cost efficient comparatively.
As Chinese auto brands have not established complete after-sale service network in the Arab countries and local customers always find it difficult to access components for replacement, the Chinese brands did not win public praise among local customers.
For another, Chinese auto brands do not enjoy high brand recognition since most of them have been on the Arab market for less than 10 years. Chinese auto brands have not established features of wide recognition, except for cheap price, in Arab states, said Wang Xia, director of the Automotive Committee under China Council for Promotion of International Trade.
"It is unsustainable for Chinese auto brands to stay in the low-end market in Arab states and it is time for us to climb up to the high and medium-end market," Peng Lei, a manager of BYD Auto in charge of the Middle East market, told Xinhua.
Chinese auto brands used to rely mainly on local dealers for sales volume in the Arab states, without encouraging the latter to invest in brand building. Yet now the major automakers agree that they should provide fiscal incentives for dealers to help upgrade brand image on the local market. Geely, a famous Chinese auto brand, has been splitting costs of brand promotion with local dealers since the brand entered the gulf countries, which has proved to be effective.
From 2012, the Chinese automaker exported more than 15,000 vehicles to gulf countries every year, more than most Chinese counterparts. Promotion on social media, such as Facebook, YouTube and Twitter, is quite efficient on some Arab countries, managers from BYD Auto and Geely added.
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