The Segmentation And Forecasting Research Of China Car Market

Stan Rapp and Tom Collins, two famous marketing experts in America, pointed out that marketing experienced a shift from mass marketing in 1960s to individualized marketing in 1970s. No single product can cater to the demand of all people, so market segmentation becomes the essential prerequisite for marketing. At the background of ever-improving living standard of Chinese people, the sedan market shows a double-digit expansion rate with private sedan being the most powerful momentum. At present in China, sales volume of sedan has already outperformed that of truck and bus, at the end of 2002, sales volume percentage of sedan, truck and bus was about 35:33:32, which indicates a profound change in automotive consumption structure in China. Now, China is entering into an era of private sedans. But, with China's accession into WTO, the tariff of automotive products is set to lower gradually, China automotive market will feature more openness and fiercer competition, which is a rule of the market economy.As such, how to make reasonable segmentation for automotive market and how to make effective prediction for its development potential become the concerns of the automotive manufacturers. This paper sets out to explore the criteria and method of automotive market segmentation before moving on to method and model of market prediction. Finally, the paper presents the expectation on China automotive market, which aims at providing some beneficial insights to manufacturers and marketing researchers.Foreign sedan markets have been developing for a long period, the fierce competition has contributed to the emergence and development of market segmentation theory and methodology. Internationally, the sedan is classifiedin terms of chassis, engine displacement, engine power, interior space, etc. The domestic sedan market has witnessed rapid development in recent years while in the same time, sedan manufacturers are confronted with opportunities as well as challenges. The study makes an analysis on the status quo, development and relevant influence factors of domestic sedan market and points out that, for domestic sedan market segmentation, there is still no specific method that is applicable to the actual situation of Chinese market. Based on this, the study puts forward a sedan segmentation method with wheelbase as the main index, while at the same time, gives attention to the price. Under this method, sedan can fall into 6 categories: mini, small, compact, medium, medium large, and luxury.Market segmentation is a prerequisite for better understanding of the overall market. But market segmentation alone is not enough, it must be coupled with market size prediction to achieve pinpoint accuracy in understanding the market. Therefore, this study provides a comprehensive statement on method, technique and model of market prediction, then collects historical data of the sedan market according to relevant theory and method, followed by prediction on domestic sedan market size, further more, the study also makes prediction on demand for each segmented section.There are many methods for market prediction, but these methods can largely fall into two categories: qualitative and quantitative. In this study, four models are adopted, namely exponent model, elasticity model, trend extrapolation model and multi-variable linear regression model. Considering the strength and weakness of each model, the study adopts average results of the four models, thus making a prediction on demand for different makes and models of the 2004 sedan market. According to prediction, in 2004, the overall demand is 2640500 units, among them, demand for mini, small, compact,medium, medium large and luxury sedan is 182600, 706900,1216800, 670800, 122300, and 761900 units, respectively. The number displays a stable increase on demand for sedan on Chinese market.According to prediction from Ministry of Commerce of the People's Republic of China, domestic sedan output will reach 2.6 million units, a 26% increase over 2003. The figure is very close to result of this st...