GM FORD

GM and FORD

GM and FORD

General Motors Analysis

Market Analysis

Along with the growth in the economy, the government has radically reformed the country's infrastructure, and transportation has been a key part of this reform. Not only are more new roads being built, but new city and town development is now designed much more with the needs of a travelling public in mind. The travelling public is increasingly aspiring to own a car(Eisenstein, 2007). Although public transport has improved greatly in recent years, rising average consumer incomes have meant that Chinese consumers have started to set their aspirations much higher, and are not only wishing to buy cars, but are increasingly able to afford to buy.

This is especially so as Chinese retail banks now offer loans for car purchase. Car insurance policies are now more common, and can even be taken out over the Internet. Government taxes and official red tape is being reduced, making the car buying process easier.

The consumption field saw new growing points as on housing, tourism and car, especially the last item, which has kept a 50 percent growth rate and nearly 70 percent purchase made by private buyers. Experts say a turning point will appear for families to own cars when the ratio between the price of cars and Gross Domestic Product per capita reaches two or three.

The ratio in Beijing, Shanghai, Guangzhouand Shenzhen cities has nearly reached this level, so sales of private cars will increase in those cities. In the first seven months of 2003, the sale of cars has continued to rise with the number of new sales at 190,000. (ChinaEconomic Trend, 2003)

Specific Target Market

Project "redSEDAN", hence is to be launch targeting at families of 2 to 4 members as well as up-and-coming young white collar workers located in Zhejiang, Shanghai, Beijing and other major cities who are having higher income and increasing disposable income(Bradsher, 2008). The launch will be concentrated in Shanghai as the people belong to one of the highest income group (average of 1,273.24RMB per household) and there are also sufficient numbers of households (close to 500,000 households) that will deem the project sustainable and profitable.

With Shanghai population of 1.8 million and the increasing working population, it is a major market to be tapped into. Increasing affluences of the people and their high pride makes Shanghainese more prone towards buying of luxury goods that can reflect their status, wealth and personalities, hence, the ownership of a luxury car are very important to them.

Competitor Analysis

Competitions in the China market include other major international automobiles player like Japanese Toyota, BMW, Hyundai from Seoul and Volkswagen etc. Local car manufacturers are also a big threat as they penetrate the market through extremely low pricing of the vehicles and hence the vehicles are more of a necessity rather then a luxury item. China has also developed its first automatic sedan.

Changchun-based First Automobile Works (FAW) and the National Defense Science and Technology University have jointly worked on the ...