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Published on : Jul 07, 2014

With more and more international carmakers penetrating the Chinese market with cheaper models, local automakers have been force to step up their game. This has led to a 14% rise in passenger vehicle sales in China last month. The Chinese government has pushed for stricter sales regulations to control pollution and traffic congestion. Thanks to the new policies, foreign automakers have seen this as an opportunity to introduce cheaper versions of international passenger vehicles. Local competitors are finding it increasingly difficult to keep up with the influx of foreign brands in the market.

Targeting the mid-end and lower end of the market, carmakers like General Motors Co. (GM) and Volkswagen AG (VW) have entered the scene. Aveo, the USD 12,000 subcompact sedan by GM is cheaper than BYD Co. (1211)’s G6 version. SAIC Motor Corp, China’s biggest automaker, gas been facing severe shortage of talent and innovation, which reflected in its sales earlier this year. Drooping sales has led to replacement of three top executives at Great Wall Motor Co., the largest SUV maker in China.  

Premium brands like Bayerische Motoren Werke AG have also expanded in China, and recently extended its partnership with Brilliance China Automotive Holdings Ltd.