An interview with Mr. Jürgen Diebold, Director System Projects Design & Verification, Chassis & Safety Division, Continental

An interesting fact is that a great majority of international firms have effectively defended their market positions against local brands. Compared with five years ago, international brands have lost about 5% share of the rapidly expanding passenger car market. Through July, they are still comfortably leading the Chinese market with a total share of 70%. Year-to-date sales growth for most multi-national corporations (MNCs) is up 20% from last year. While some of this success is a result of an expanded product portfolio, it appears that MNCs have maintained their sales success without a dramatic increase in new product launches. One of the most innovative approaches we have discovered is what we would call “adaptive brand innovation”. This approach involves delivering market-specific adaptations and modifications, extending the range of segment participation to new price-points and product categories, and creation of new brands and products. Many of these approaches are often taken together with local Chinese partners.

Attracted by the tremendous growth of these segments, many multi-national brands are expanding their product portfolio into smaller segments. Examples include the Ford Focus Hatchback, Chevrolet Cruze, PSA 207 Hatchback, Hyundai i30, VW Polo Sport, Toyota Yaris, smart Fortwo, and Kia Soul. Attracted by the desire to raise their brand image, and achieve higher margins, the Chinese carmakers are also expanding their product portfolio – into larger segments. Examples include Chery’s Rely V5, Riich G6, Dongfeng’s S30, BYD’s S8 and M6, Geely’s Dihao and Yinglun and the Brilliance Zunchi.