NISSAN | Dongfeng Nissan President Kimiyasu Nakamura discusses the Chinese auto market with the Global Media Center

1 Oct 2014 | Author: | Comments Off on NISSAN | Dongfeng Nissan President Kimiyasu Nakamura discusses the Chinese auto market with the Global Media Center

Nissan President

Q1.

Which regions and segments will spur sales growth in China?

I think everyone should know that that the motorization in China started from the coastal area. The gap in quality of life between coastal areas and inland areas was huge so government is very keen to minimize this gap. A lot of investment has been made through the last two-to-three years, so the gap between household incomes and quality of life is getting smaller.

Inland people are starting to think they can buy their first cars. Thinking about the ratio of first-time buyers, in coastal areas it’s less than 60 percent, with 40 percent replacement or additional cars.

Meanwhile, in inland areas more than 90 percent of people are first-time buyers and the number of people is huge. For example, Henan province, where Zhengzhou Nissan is located, has over 100 million people or the same as the Japanese population.

My point is that even though the Chinese auto industry started motorization from the coastal area, [we must] very much focus on the trend and dynamism of the inland people.

Q2. This year Beijing has restricted car-ownership licenses. What’s the impact of this?

Thinking about traffic jams in Beijing city, that kind of direction might be very neutral. So far, we can’t see any other provinces following the same direction, but the fact is the people having the ‘lucky draw’ has limited one third of Beijing’s original vehicle TIV (total industry volume).

Having said so, total passenger-vehicle TIV this year compared to last year shows 9.7 percent growth. Beijing is the second biggest city and had a one third decrease and [still] China is growing. This means inland areas will have more power.

This reduced volume in Beijing can be easily compensated by the inland areas.

Q3. What are the prospects for the new Venucia brand?

Nissan President

If we were analyze the vehicles sold in China’s inland areas, it’s very much China’s local own-brands. Because people living in coastal areas have a vehicle [which is] their second or third car, they have very good eyes or taste for a good car, bad car, attractive or an unattractive car.

In inland areas, people have just started to have the money to buy their first car which they want to be proud of in front of their neighbors [and] to be reasonably gorgeous but cheap.

So, inland people have tended to buy local makes but it’s resulted in a lot of frustration and complaints because of the poor quality even though they didn’t pay much money. Venucia will be the answer to the people who would like to buy their first car, but having the guaranteed quality of Nissan.

This is because the Venucia vehicle will have the badge of Dongfeng Nissan. People in China nowadays know Dongfeng Nissan is a good car manufacturer with good quality vehicles [and] with good quality of service. In that sense, a Dongfeng Nissan-badged Venucia offers completely different to people.

Even though the price is attractive enough, the vehicle is reasonably roomy, equipped with a Nissan guaranteed-quality engine and overall world level of quality.

That’s a good differentiation factor compared with conventional Chinese cheap but low quality [vehicles]. On the other hand, our Venucia is reasonable, attractive priced and guaranteed quality. That’s a good driving force to attract people who are buying a car for the first time.

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