The Pricing Of Auto Production In China

Auto Industry of China moved from planning economic systerm to marketing one in past decades.The internationial interest and technic pushed the development of the whole Auto industy.Expact auto production, all the management including financial management / financial analysis/ Marketing etc. got the experience from very beginning to the period of study and perfect.During this period the cost analysis/ cost calculation and the process of pricing got attention in all the fields. The structure of main moto factories in China was set up in l990's. The Industry has developing ability based on scaled product capability.From century 21, China auto industry entered the period of fast developing. All experts in fields showed the positive attitude of it. At the same time, the industry caught more invest from others in order to match the fast development.And many company changed the production. Above all based on the expection of the whole auto market development.The foundation of judgement is GDP development /the situation of traffic / oil providing and credit policy.The whole marketing decreased from the second season of 2004. The statistical data said big difference between forecast and realistic.The proplem company facing got the attention of science.Influnce factor of whole market became the hot topic in field of sience and industry.The stock increased fast because the whole market broken. Not ideally performance happened althouth many measurement operation from factry and dealers. All the company decreased the price in order to catch more market share.The biggest price-war began in Chinese auto history. The price decreasing influnced the profit directly and inoflunced the purchasing behavior of customer.The profit of most factories was negative. And some provider was broken. Then pricing became the focus in auto industry. The field of science began to study correlative topic since 2004.The main content of studyAuthor used the data of whole auto market of China and GDP to analysis based on the study of other conclution. And studied the influence factors of auto market / pricing / mothed of pricing and model of pricing deeply. The main study content followed:The first one is influence factors of marketing development in China analysis.The judgement of market development based on development of GDP/ situation of tranfic and credit policy etc before 2002.The factor of GDP is the most important one.The expereince curve shows the same picture of it.But the huge warp between focus and realitive on original base. Author compared 10 years data of GDP and auto market and study deeply.The second is the study of relativity between market development and macrocontrol from central government.Author tested all the factors during the analysis process. Focus on macrocontrol from central government after the test. Author definited the point on the beginning of 2004 April because the publicizing of macrocontrol policy from central government department. The data of April in 2003 and 2004 was analysised by T-test in order to study the relativity between market development and macrocontrol from central government.The third one is analysis of regional difference to pricing production.The same auto procuction used the same price in whole China during the whole production circle.Author researched the custmor groups in different region on different factors. Divided the whole market to five independent regions and studied the price sensitive among these five regions.Auto production pricing study in current period:The first is suited pricing method in China industry.There was summary of pricing method in science field.Author compared all the method and studied the process of it. All the study focused on the applicable ability / cost and marketing and gsve the scientive pricing method.The second is the model of auto production pricing: Author setup the model of auto production pricing and described the precondition as followed:- The production existing in the market which has more brands procution. The proction which needs pricing face the competition of more than one brand;- Every brand has more produtions which have difference between them. The price cant be divied according on cost simply;- The customer has relative intellect knowledge;- All the parameter in the model is danamic and quatble. The model can be used at the new production pricing and adjustment after new production launched: P = C_∑+ EP is the price of production;C_∑is the function cost;E is the value of brand. The caculation method of factors in pricing model is followed:- Fuction cost :C_∑is the fuction cost.It is the sum of allthe composing factors on the function: C_∑= C₁ + C₂ + C₃ +…+C_i + C_i+1 +…+ C_nC_i is the marketing cost instead of the product cost. It is confirmed according on market adjustment.Author divided al the auto function into four types: power/comfortable/safety and design. The function cost is marketble cost in order to implement the function. So the function dividing is the key point of it.Author list about 150 function of auto and research by questionnaire.Ci is confirmed after comparing marketable cost and product cost.The calculate method of brand as followed: E = Q×M. Q is profit from brand;M is brand level.Author analysis the factor of brand level and found the following ones: leadership,survive,market charactor,the ability of international,industry development direction influnce,brand support,brand protect,brand legitimacy and was protected.Caculate it after comparing the above seven factors.The main creative points in studyThe idea of research cross several fields.There is some creative points based on the studies.The main part of creative points following:The first is creative study content. Extending the pricing to the cross field of financial/marketing and economic etc.Analysis markeing topic by finacial measure.Reture result to the field of finace and compare it with profit.Direct the whole procee of pricing;The second is creative study thought.Consider the pricing as a financialtopic. Defined the start of study at customer research.Expanding the financial topic to field of psychology and marketing;The third is creative study method. Study among escaped shopper in order to see the price sensitive of different group;The next one is creative auto production pricing model: P= C_∑+ EThe last one is creative concept. It is the first time using'function cost'.There are four types of function in auto production which is powerful,comfortble,safety and design. The function cost is marketable cost which was provided for the function.There are two parties of conclusion in paper mainly as followed:Part one is analysis of influnce factors in Chinese auto market.The first is study of GDP and the whole auto market relative relationship.Author compared the GDP and whole auto market data of 10 years.And found nonlinear relationship between GDP and whole auto market development.It should not judge the relation between them only though the whole market fluctuation.The second is relative study between the whole auto market and macrocontrol.Author studied the relative relationship between auto marketand macrocontrol by comparing the data of 2003, April and 2004,April and got the conclusion: the influence of macrocontrol to auto market development is distinctive.The third one is influence analysis of regionial difference to production pricing. Author found the difference of price sensitive in different region.Part two is auto production pricing study in current period in China.The first is suitive pricing method study. Author found cost-oriented pricing was used abroadly since years.It is simply operation but production market suitive was ignored. And calculation method of cost would influence the price confirmation; Customer-oriented pricing has theory reason but was limited by customer's knowledge so the suitive is not so good; Competetive -oriented pricing is suitive related. But it is difficult to compare the price since too much difference between products. Author consider that should conbine above three one to price auto production. Usecustomer-oriented to pricing the function cost. Brand value pricing by using competitive-oriented and calculate the cost by using cost-oriented. Compare all of above price and balance them to confirm the finial pricing.The auto production pricing model was setup in paper. P= C_∑+ E C_∑= C₁ + C₂ + C₃ +…+C_i + C_i+1 +…+ C_nThis model could be used to pricing the auto production.The brand value data could be used in accountant balance sheet.