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Paying attention to rural market segments is the only way for auto companies. This is because multinational corporations will restrict the export of automobiles produced by Chinese joint ventures due to their global strategy. Under the current situation in which the competition in the first-class auto market is getting increasingly fierce, they will seek new breakthroughs in the market and change their product structure. The secondary and tertiary markets, such as county and township, are crucial to the future development of the joint venture. For state-owned and private auto companies, the fierce competition also determines that they can't focus on the urban market alone and rely on walking in one leg.
The rural market has been highly valued by companies. We are delighted to see that the rural market has attracted the attention of companies. Recently, Chen Yinda, Vice President of SAIC Group, stated in the "Eleventh Five-Year Plan" of SAIC Group that the rural market and the urban market should be put forward simultaneously. “China's rural areas have huge potential in the auto market. SAIC will adapt to the trend of accelerating urbanization in rural areas in China, strengthen research and analysis of rural markets, and use agricultural vehicles as an opportunity to accelerate the entry into agricultural production with mini vehicles as a starting point. Mainly taking into account the market segments of the peasants' lives," Zhu Xiangjun, a spokesman for SAIC Motor, told reporters.
The reporter then asked FAW Group and Dongfeng Group. The relevant persons in charge of the two groups told reporters respectively that due to the “Eleventh Five-Year Plan†being formulated, it is unclear whether the reference to the rural market will be included, but they have Specialized market institutions are doing research and development in the rural automobile market. Zhao Jingguang, deputy secretary of the Futian Party Committee, also stated that the rural market is the “base camp†of Futian and they have always attached great importance to it.
Rural market is a tempting cake
Why is the rural auto market clearly put forward and attracted the attention of many companies when it is about to move towards the "Eleventh Five-Year Plan"? First look at several sets of data:
According to the fifth national census data, more than 800 million people living in rural areas account for 64% of the total population; in China, there are 240 million rural households, and if a household buys a car, there will be a demand for 240 million vehicles, and in 2004, The total sales volume of China's autos was 5.07 million units. The year 2004 was the best year for rural economic development since 1996. The increase in grain output, farmers' income, and the market warmed up. Farmers’ income increased by more than 6%. Farmers’ market purchasing power was achieved. Significantly increased.
In recent years, the issue of agriculture, rural areas and farmers has been highly valued by the Party Central Committee. The development of the rural economy, the increase in the purchasing power of farmers, and the increasingly active consumer market in rural areas have created a basis and possibility for automobile demand and consumption. According to Chen Guangzu, a member of the Expert Committee of the China Association of Automobile Manufacturers, “The 11th Five-Year Plan of the Central Automobile Industry attaches great importance to the issue of distribution, and clearly stated that the construction of a new socialist countryside is a major historical task in the modernization process in China, and every effort should be made to increase farmers’ income and achieve common prosperity. This means that in the post-industrial era, with the increase in the income level of farmers, the rural automobile market will become an important opportunity to drive the auto market."
Experts pointed out that due to historical reasons, China originally divided agricultural vehicles and automobiles into two industries with distinct boundaries. This approach is not very smart, and agricultural vehicles have a series of problems in terms of safety and environmental protection. Chen Zutao, a full-time member of the Ministry of Science and Technology, pointed out that agricultural vehicles will eventually be replaced by regular cars. Zhao Jingguang also told reporters: “Agricultural vehicles are special industries created by China’s special era and special management, and will not exist as an industry in the future.†At present, China has more than 17 million agricultural tricycles, four-wheel vehicles and more than 10 million vehicles. All kinds of tractors. Every year, 3 million agricultural vehicles and 2 million tractors are sold. If these agricultural vehicles are replaced with automobiles, what it means for auto companies is self-evident.
Produce regular cars needed by farmers,
Companies must be prepared to face the rural market. There are many things that auto companies need to prepare. Zhu Xinkai, School of Agriculture and Rural Development, Renmin University of China, pointed out: “Exploiting the rural automobile market is a very complicated matter. It is linked with rural infrastructure construction and is linked with various rural policies and links with the farmers’ concept of consumption. Together, and because China's rural market is geographically vast and the economic conditions and needs of each place are far from each other, companies need to conduct in-depth research and investigations.†“The most critical thing is that companies must produce regular cars that are suitable for rural needs.†Chen Zutao stressed.
Because the income level of the peasants is still not high, it is determined that the level of purchasing power is still low. According to the latest statistics, the per capita net income of farmers in China in 2004 was 2,936 yuan, of which the disposable cash income was 2,300 yuan, which was less than 1/3 of the annual per capita net income of urban residents. How to solve the contradiction between demand and purchasing power is also a problem that must be solved.