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Demand for SUVs on the rise in China
( 2003-08-07 10:33) (China Daily)

There are clear signals that there is huge potential for sport utility vehicles (SUVs) in China, although they now account for a small proportion of the domestic passenger-vehicle market.

Many automakers, including foreign giants and local players, plan to introduce more SUVs to cash in on the growing craze.

The biggest move will be made by Toyota Motor, Japan's No 1 automaker, which will launch three SUV models this year.

The three models - Terios, Land Cruiser and Land Cruiser Prado - will be manufactured at Toyota's three joint-venture plants with First Automotive Works Corp (FAW), China's biggest automaker, in Tianjin Municipality, Jilin and Sichuan provinces respectively.

General Motors, the world's largest automaker, will introduce two SUVs - Chevrolet Trailblazer and Tahoe - at its joint venture in Liaoning Province this year.

Changfeng Group, an affiliate of the Chinese military based in Hunan Province, will start to sell Feiteng SUV, a model based on the Pajero IO of Japan's Mitsubishi Motor, next month.

Mitsubishi, 37 per cent owned by DaimlerChrysler, will also produce its Pajero Outlander at the joint-venture in Beijing - Beijing Jeep Corp - during the first quarter of this year.

"I believe China's SUV market will grow steadily in the coming years. Otherwise, automakers would not launch so many new models," said Weiming Soh, sales director of Beijing Jeep.

Around 17 new SUV models were introduced in China during the first half of this year, equal to the number of newly-launched cars and sedans.

"SUVs will account for 25 per cent of the domestic passenger-vehicle market by 2007, up from less than 10 per cent at present," he said.

Industry statistics indicate that SUV demand in China stood at around 60,000 units during the first half of this year, while sales of domestically-made passenger cars totalled 842,800 units.

Soh forecast that the SUV market would hit 150,000 units this year.

Meanwhile, China's SUV imports reported the biggest growth among all types of automobiles as a result of mounting domestic demand.

The nation imported 23,300 SUVs during the first half of this year, an increase of more than 100 per cent from a year ago, according to statistics from the China Trading Centre for Automobile Imports.

"SUVs will become more popular as many people are seeking driving individuality and the vehicle is very suitable for the road conditions in China's vast central and western regions," Jia Xinguang, chief analyst with China National Automotive Industry Consulting and Development Corp, told China Daily.

"However, the domestic SUV market is not mature. Some models being made by local manufacturers feature low technology and should not be counted as real SUVs," Jia added.

SUV producers have also launched a round of price cuts to fight for market share - the biggest was by Changfeng Group, which cut prices of its Liebao SUV by as much as 56,800 yuan (US$5,800) at the beginning of this year.


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