27 April 2011

JLR To Ramp Up Chinese Sales

I do not give the Chinese car market much attention. Statistics out of that country are variable and usually only include locally built cars. As to why someone does not take charge of it and release consistent, relevant data of all sales by each brand shows how far China has to go to being an open, transparent nation. I saw some figures showing VW sold 1.47 million cars in China in 2010, and GM 1.04 million. I wouldn't put money on it though. In the premium sector Audi delivered 228,000, while BMW sold 158,500 and Mercedes Benz 147,500 , including imported models - as best I can tell.

In comparison, Jaguar / Land Rover have been slow to act in China. They are cautiously looking at local manufacturing but are still yet to commit. Making cars in China avoids very high import duties, a government tactic to reduce imports. China has become such an important market, car makers comply and enter the necessary joint venture deals in order to get much improved sales, and therefore greater profitability.

To see how the Chinese market has grown for cars, I have compiled some figures regarding JLR. In 2004, Land Rover sold only 700 vehicles, by 2007 6,600 and in 2010 23,500. In three months of 2011 so far, nearly 8,000 (+49%). Likewise Jaguar 2004 - 200, 2007 - 1,100 or so, 2010 - 2,650. Three months of 2011 - just over 800 (+39%). That represents solid growth even without local production. China is about to pass the US to become the biggest market outside the UK for LR, while Chinese Jaguar sales have just passed Germany to become the second largest export market.

China is so important to all car makers, and you need strong infrastructure to reach your potential customers over such a large country. In 2009 JLR had only 40 dealers, 2010 60, and by 2011's end close to 100. 40,000 sales for the two marques is the goal for 2011, a 54% increase.

In summary: JLR were tardy in getting into China but they are now playing catch up.

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