Monday, March 13, 2006

Car-buying in China

Another China Fact of the Day courtesy of Business Week via Marginal Revolution:
84 percent of new car sales in China are to first-time buyers. In the U.S., just 1 percent are.

What does this tell us about China? If you were starting a business in China, what type of business would you start (other than a car company)?


Arthur said...

I would take a page from the westward expansion years of the USA. Why bother mining when you can sell supplies to the miners?
Sell automobile shocks. Sell after-market radios, seat comforters, and little doggies to put in the back window that have bobbing heads. In short, support the growth but don't try to ride the wave.
Caution to those who wish to try, make sure you can re-patriate your earnings into american dollars, yen, euros or pounds; just make it something that can be used.

Gregory Bylos said...

I would sell insurance since they are first time buyers and are not likely to have any already.

I definitely agree with Arthur about selling things that car users will be using since cars are a long term investment and even if car sales fall, all those people that bought cars will still have them.

Anonymous said...

I agree with arthur also. Accessories for cars will sell as long as cars are selling, but thats highly dependent on the buyers wealth if he has enough money to spend extra on his already expensive car. I also think car maintainance and repair will be a good place to start. New drivers arent going to be changing their own oil, brake pads, or any other wear and tear parts. And with so many new drivers we would think accident rates will increase.

-the foss

Anonymous said...

This fact tells us that the people of china buy a car and use it as long as they are able. This could be because they do not have the disposable income that the people of the U.S. have. Understanding this i would open a car part and maintenance company. If these people are going to use their car until it just wont run anymore, then i would want to have the place where they would HAVE to come to to keep it rolling.
David Hale

Anonymous said...

I have to agree with the Foss and all the other guys. If I was over there and this boom was going on, I think it'd be nice to have a gas station or fifty. It'd also be pretty lucrative to be a highway contractor, since all these new cars are going to need places to drive. Also stuff like driver's ed (not sure how well that would work) as well as aftermarket parts or a wrecker service could make you some money. One thing to remember about maintenance is that it will likely be done by the dealership and not by individual garages, and the parts used will be supplied by the manufacturer under warranty, so there isn't as much money to be made there (at least initially) as it may seem. The equivelent of NAPA auto parts would need a few years to catch on, basically until many of the initial warranties expire.
-the gelly

Kind Kimberly Burky said...

This would tell us that most people in China do not already have cars. Or, they are just recently starting to invest in bigger pieces of equipment. If I were to open a company in China, I would start a large machinery company such as tractors or something. Because the Chinese are starting to gain more disposable income to purchase bigger items, each may need a tractor or two for their farming. I mean, probably not a tractor because of the boggy land, but some piece of machinery like that. The Chinese tractor perhaps. That would be my company, fo sho.

Anonymous said...

Since the car industry is bigger in Japan than in China, most people in China have lived without cars as a necessity. We think of new car buyers as teenagers who have just received their licenses, but many older people are buying cars for the first time also. Younger buyers would be more inclined to buy insurance than older people who do not realize the importance of car insurance. Also, I doubt many people over the age of 30 will be putting after-market parts on their rides, especially if it is their first and they need it to last them awhile.


Anonymous said...

This tells uss that China is country that is going through a large economic boom where people can now afford things that they couldn't before. I agree with arthur and greg that car related products would be a good thing to sell, but I also think that other appliances that are on the luxury sided like cars would be a good business. If people now have money to spare on cars they most likely will also start buying other household appliances such as say washing machines or dishwashers.
erin clay