Home turf war (2)

Roads less traveled

According to a statement by the Ministry of Transport on February 16, during the Spring Festival holiday from February 9 to 15, passenger vehicles with seven seats and fewer made over 89.7 million trips on highways across the country for free, translating into a total of 846 million yuan ($135.7 million) in savings on toll fees. The free-pass policy was implemented to facilitate the largest human migration on earth that takes place annually in the country as well as to provide incentives for traveling.

The Chinese people's insatiable desire for mobility obviously sends a positive signal to foreign automakers. Since markets in major cities are saturated, some of which are also constrained by plate-rationing policies, overseas auto companies are following less-frequented roads toward third- and fourth-tier cities.

Volkswagen (VW) Group, the second-largest automaker by sales in China after General Motors (GM), planned to deploy 13 new dealerships for its imported models in the first quarter of 2013 in Jiangsu and Zhejiang provinces in East China, entering fourth-tier cities such as Zhoushan, Cixi and Huzhou for the first time, financial news portal jrj.com.cn reported Monday, citing Hu Bo, VW's marketing director in China.

The new expansion strategy indicates strong demand for mid- to high-end imported cars in developed regions and great market potential in smaller cities in these regions as well, it said, noting that VW is expected to have 40 dealers in East China by the end of March.

Volkswagen said it would cater to the market's needs, provide better services and raise consumer satisfaction in a bid to achieve new sales records in China.

"We've been adding two (dealers) a week. We have 70 or 80 dealerships planned for 2013," David Schoch, president of Ford Asia-Pacific, told auto-

newschina.com in an interview published Tuesday.

"The majority of our new dealerships will be in tier three, four and five cities.
The key for us is to expand west, which is what the government wishes," Schoch noted.

He expects that annual vehicle sales in China will get close to 30 million units by 2020.