The Rising Influence of Rising Affluence

[DewDiligence]

Multinationals gain traction in China’s automobile market:

http://www.nytimes.com/2014/04/09/business/international/chinas-embrace-of-foreign-cars.html

Now there are calls for protectionism, but from an unexpected direction: the biggest, most politically influential Chinese automakers.

Multinational corporations are steadily clawing market share from Chinese brands in their home market, as a succession of global brands have pushed their way into China.

…Chinese consumers increasingly favor American brands, which have a reputation for safety, youth and international flair. The domestic brands have tended to lag in surveys of initial quality and engineering, although they are starting to close the gap. In long-term reliability, they are far behind and falling even further.

Rising affluence has left consumers reluctant to accept cheaper, spartan models from domestic manufacturers. The domestic brands have been further hurt by poor crash test results for some Chinese-designed models…