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Chinese government vehicle purchases shift towards new energy automobiles, growth opportunities for own brand manufacturers abound

 In less than two years time, the influx of new own brand models for use as official government vehicles has all but disappeared. Most of the country’s domestic own brands, including BAIC’s Shenbao, SAIC’s Roewe, GAC’s Trumpchi and Changan’s Renton are not seeing a large influx of sales from the government sector; FAW Hongqi remains the only major exception to this trend.

However, not all hope is lost for own brands. An increasingly prominent trend in the government vehicle sector is the increased focus on new energy vehicle purchases. This trend has been brought on in part by government legislation which mandates that new energy vehicles account for at least 30 percent of all government vehicles purchased between 2014 and 2016.

Jia Xinguang, a renowned automotive industry analyst, told the National Business Daily that he believes this trend will bring more market opportunities for own brands than for joint ventures. He stated that by using these opportunities, own brands can strengthen their brand image, which will prove very beneficial for their long-term development.

Approximately 50,000 new energy vehicles are expected to be sold in China this year, with over 60 percent of those purchased for use as government vehicles. With the new energy vehicle industry still growing, these government purchases will play a major role in encouraging manufacturers to further their new energy vehicle programs and increase the technology of both the vehicles and related auto parts.

Commenting on the topic, An Qingheng, deputy director of the China Association of Automobile Manufacturers’ Consulting Committee, stated that the biggest effect government vehicle purchases will have on new energy vehicles is bringing them to the forefront of the market, which in turn helps ordinary consumers better understand and accept them.

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