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CHANGING CURRENTS
REFLECTIONS
The MEDIUM, the MESSAGE and the SAUSAGE DOG
CYCLING TO XANADU
THE CHINESE DREAM
CHINESE NEW YEAR ADS
BEYOND THE WALL
ANYONE FOR TENNIS?
VIEWS FROM ABOARD THE CHINA EXPRESS:
1 Zola and Retail Marketing
2 Playing the Waiting Game
3 Beware the Ides of March
4 The county not on a map
5 Chinese Chess in Beijing
6 Build it and They'll Come
7 Riding the Water Dragon
8 The Best of Both Worlds
9 Storming the Great Wall
10 Welcome to the Wangba
11 The Catcher in the Rice
12 The Marriage Business
13 The Crouching Dragon
14 Counting the Numbers
15 A Century of Migration
16 Shooting for the Stars
17 Rise of Yorkshire Puds
18 Harry Potter in Beijing
19 Standing Out in China
20 Self-pandactualisation
21 Strolling on the Moon
22 Tea with the Brothers
23 Animated Guangzhou
24 Trouble on the Farms
25 Christmas in Haerbin
26 Dave pops into Tesco
27 A Breath of Fresh Air
28 The Boys from Brazil
29 Rolls-Royce on a roll
30 The Great Exhibition
31 Spreading the Word
32 On Top of the World
33 Moonlight Madness
34 Beijing's Wild West
35 Avatar vs Confucius
36 Brand Ambassadors
37 Inspiring Adventure
38 China's Sweet Spot
39 Spinning the Wheel
40 Winter Wonderland
41 The End of the Sky
42 Ticket to Ride High
43 Turning the Corner
44 Trouble in Toytown
45 Watch with Mother
46 Red-crowned Alert
47 In a Barbie World
48 Domestic Arrivals
49 Tale of Two Taxis
50 Land of Extremes
51 Of 'Mice' and Men
52 Tour of the South
53 Brooding Clouds?
54 The Nabang Test
55 Guanxi Building
56 Apple Blossoms
57 New Romantics
58 The Rose Seller
59 Rural Shanghai
60 Forbidden Fruit
61 Exotic Flavours
62 Picking up Pace
63 New Year, 2008
64 Shedding Tiers
65 Olympic Prince
66 London Calling
67 A Soulful Song
68 Paradise Lost?
69 Brandopolises
70 Red, red wine
71 Finding Nemo
72 Rogue Dealer
73 Juicy Carrots
74 Bad Air Days
75 Golden Week
76 Master Class
77 Noodle Wars
78 Yes We Can!
79 Mr Blue Sky
80 Keep Riding
81 Wise Words
82 Hair Today
83 Easy Rider
84 Aftershock
85 Bread vans
86 Pick a card
87 The 60th
88 Ox Tales
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Turning the Corner 

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A lucky year for auto companies?

The much-vaunted four trillion yuan economic stimulus package seems to be working a treat. That is, if the queue of people waiting for a test drive in the Honda dealership was anything to go by. The tide turned on January 20th when the government halved its earnings from purchase tax (from 10 to 5 per cent) on cars with smaller engines. Most of the people watching TV in the Honda showroom, though, had been waiting to drive the 1.8 litre Civic, which is a splash or two higher than the 1.6 litre qualifying size.  But, thanks to the marketers at Honda’s quick response, no one there was thinking that they would be losing out on the tax giveaway. That’s because Honda are offering a 5 per cent special discount on the Civic that cancels out any perceived advantage enjoyed by manufacturers whose stables are dominated by 1.6 litre vehicles and lower.

 

  Before my weekend tour of the car showrooms I had thought that the strong performance in March car sales had been driven by far deeper discounts than the paltry 5 per cent that is being offered by Honda.  But, no matter where I tried, I found it impossible to get any offer exceeding that level.  


  Compared with what’s going on in other parts of the world, car sales in China are in a completely different gear.  In March, passenger car sales (including SUVs and MPVs) increased to 772 thousand.  That’s 27 per cent more than in February and more than ten per cent compared with the same month last year.  


  The figures further consolidate China’s position as the world’s biggest auto market – a position it has now held for three consecutive months.  If China is motoring ahead, then the US is in reverse gear – and a high ratio one at that (last month, vehicle sales were down 37 per cent year-on-year).

 

  “How was the test drive”, I asked Ms Zhou, who had her eye on a bright red Honda Civic. 


  “It’s too busy,” she said, “I couldn’t even get out on to the main highway.”

 

  The sprawling area of more than 20 car showrooms in eastern Beijing was indeed jammed with would-be car buyers and an increasing number of people who think that the time is now right to trade up to a better car.

 

  The days when large sedans dominated the roads, and when black Audis with blacked-out windows took their places in front of the swankier restaurants, are long gone however.  These days, people are choosing a car based on their lifestyle requirements; although status of course still plays a part (where in the world is that not the case?).

 

  But, in China, the nature of status is changing.  Size, although still important, is a less weighty factor in the decision-making process than it was.  Style, technology, and safety are contributing increasingly more “points” to the buying decision.

 

  This changing attitude is just one of the factors that is driving the growth in smaller cars.  In the first quarter of this year, 1.41 million cars at 1.6 litres and below were sold in China – that’s seven out of every ten new cars.

 

  Ms Zhou, though, was determined to do her bit to help the ‘above 1.6 litre’ category. 


  “I will buy it [the Honda Civic] because it has a very advanced engine,” she said, “…and I just love the styling”.  But, just as important, she confided, “the five per cent discount means that I pay the same tax as if I were to buy a 1.6”.   

 

  Somehow, her mind had been made up before the test drive. Which is just as well, because she was only able to get the Honda’s “advanced engine” into third gear before the sheer weight of traffic visiting Beijing’s “car city” slowed her down to a crawl.

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Turning the corner