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French autos lack ooh-la-la in China
December 21, 2011, Wednesday
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IF you set up a camera in front of Galeries Lafayette in Paris to count the number of customers on any given day, you would probably discover that more than a third of them are tourists from China. In the top-end department stores of Beijing and Shanghai, Louis Vuitton bags and Cartier jewelry are hot sellers among China's wealthy.
Move up the sales ladder to cars, though, and the fascination with French models trails off rapidly. Chinese buyers switch their allegiance to Germany. It appears they would rather pay extra to buy a Volkswagen or BMW than to buy a French-made car.
In the first 10 months of this year, German car sales comprised 16.6 percent of passenger vehicle sales in China, while French makes took only a 2.8 percent market share. In a sense, French car sales in China are stuck in first gear, while Germany's are in fifth and cruising smartly along.
Two Sino-foreign joint ventures, Guangzhou Peugeot and Shanghai Volkswagen, started production in China almost simultaneously in 1985. Dongfeng Citroen and FAW-Volkswagen began operations in the 1990s.
Still, French cars now total only one-fifth of production and sales of their German competitors.
Is the quality of German cars five times better than French cars? Are French cars more expensive than German cars, making them harder to sell? The answer to both questions is "no." French cars are, in fact, cheaper than their comparable German rivals.
Unlike Chinese consumers, apparently, auto experts are quick to point out the smart styling of French cars compared with the more rigid designs of German models. If sales reflected the safety of body design and advancement of chassis systems, French cars and German cars should enjoy equal market shares. The only place where French cars still tend to trail German vehicles is in the leading technology of engine design.
So what really accounts for the poor performance of French auto sales?
Recent history may be a partial explanation. Before motoring hit the masses in China, senior officials and other noteworthy people in China were chauffeured around thirty years ago in large sedans that symbolized power, if not wealth.
The early introduction of Santana sedans by German Volkswagen was followed by Audi models and the Volkswagen Jetta. As more and more private citizens began buying cars, their choices were influenced by the "official car culture" that first brought foreign designs to Chinese streets.
Guangzhou Peugeot collapsed as a joint venture in 1997, largely due to poor management. That left another joint venture between Dongfeng Motor Corp and PSA Peugeot Citroen to carry the French banner in China. It first produced the Fukang hatchback, modeled on a popular European family car.
But Chinese consumers, at that stage anyway, weren't interested in economy cars. They wanted to emulate the "official car culture" with bigger, more luxury-looking sedans.
Meanwhile, Shanghai Volkswagen started production of the popular Passat sedan. Dongfeng Peugeot Citroen was slow off the mark to respond with a comparable model, partly due to poor decision-making and internal problems in the joint venture.
Dongfeng PSA finally introduced its mid-size sedan Citroen C5 last January, followed by the Peugeot 508 in July, but the new models weren't enough to fill the yawning gap that had opened between French and German cars in China.
Sales of domestically made PSA cars are expected to reach barely 400,000 units this year, while Volkswagen is expected to sell 2 million autos in China.
It must be a blow to French pride that the popularity of the nation's luxury clothes, perfumes, handbags and jewelry in China doesn't ripple through to its auto offerings. PSA Peugeot Citroen entered China early, but it failed to introduce the right model at the right time then.
It needs to take some creative new thinking on the part of French automakers to stop sputtering along and make a decisive splash with Chinese consumers.
(The author is an independent auto analyst in China and the views expressed are his own. Translation was done by Shanghai Daily reporter Hu Xiaocen.)
Move up the sales ladder to cars, though, and the fascination with French models trails off rapidly. Chinese buyers switch their allegiance to Germany. It appears they would rather pay extra to buy a Volkswagen or BMW than to buy a French-made car.
In the first 10 months of this year, German car sales comprised 16.6 percent of passenger vehicle sales in China, while French makes took only a 2.8 percent market share. In a sense, French car sales in China are stuck in first gear, while Germany's are in fifth and cruising smartly along.
Two Sino-foreign joint ventures, Guangzhou Peugeot and Shanghai Volkswagen, started production in China almost simultaneously in 1985. Dongfeng Citroen and FAW-Volkswagen began operations in the 1990s.
Still, French cars now total only one-fifth of production and sales of their German competitors.
Is the quality of German cars five times better than French cars? Are French cars more expensive than German cars, making them harder to sell? The answer to both questions is "no." French cars are, in fact, cheaper than their comparable German rivals.
Unlike Chinese consumers, apparently, auto experts are quick to point out the smart styling of French cars compared with the more rigid designs of German models. If sales reflected the safety of body design and advancement of chassis systems, French cars and German cars should enjoy equal market shares. The only place where French cars still tend to trail German vehicles is in the leading technology of engine design.
So what really accounts for the poor performance of French auto sales?
Recent history may be a partial explanation. Before motoring hit the masses in China, senior officials and other noteworthy people in China were chauffeured around thirty years ago in large sedans that symbolized power, if not wealth.
The early introduction of Santana sedans by German Volkswagen was followed by Audi models and the Volkswagen Jetta. As more and more private citizens began buying cars, their choices were influenced by the "official car culture" that first brought foreign designs to Chinese streets.
Guangzhou Peugeot collapsed as a joint venture in 1997, largely due to poor management. That left another joint venture between Dongfeng Motor Corp and PSA Peugeot Citroen to carry the French banner in China. It first produced the Fukang hatchback, modeled on a popular European family car.
But Chinese consumers, at that stage anyway, weren't interested in economy cars. They wanted to emulate the "official car culture" with bigger, more luxury-looking sedans.
Meanwhile, Shanghai Volkswagen started production of the popular Passat sedan. Dongfeng Peugeot Citroen was slow off the mark to respond with a comparable model, partly due to poor decision-making and internal problems in the joint venture.
Dongfeng PSA finally introduced its mid-size sedan Citroen C5 last January, followed by the Peugeot 508 in July, but the new models weren't enough to fill the yawning gap that had opened between French and German cars in China.
Sales of domestically made PSA cars are expected to reach barely 400,000 units this year, while Volkswagen is expected to sell 2 million autos in China.
It must be a blow to French pride that the popularity of the nation's luxury clothes, perfumes, handbags and jewelry in China doesn't ripple through to its auto offerings. PSA Peugeot Citroen entered China early, but it failed to introduce the right model at the right time then.
It needs to take some creative new thinking on the part of French automakers to stop sputtering along and make a decisive splash with Chinese consumers.
(The author is an independent auto analyst in China and the views expressed are his own. Translation was done by Shanghai Daily reporter Hu Xiaocen.)
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