Chinese cars price war- the shot again when shot.docVIP

 PAGE \* MERGEFORMAT 14 Chinese cars ‘price war’: the shot again when shot In 1996 and 1997, the vast land of Zengyin color TV, VCD machine turns the ‘price war’ and uproar. For a time, consumers happily, the industry has ‘a few people happy and some unhappy’. Only way to make a barrel, said lower prices were smiling because the ‘cost reduction’ and to ‘make benefit consumers’, while the competitors had to stand firm under pressure to follow later. Consumers to spend less money to buy due to ‘a few months ago seem to be elusive’ goods jumped with joy. It is this ‘price reduction’ cyclone in 1998, which clipped the car industry, it seems. December 20, 1997 Suzuki Alto 5000-6000 yuan price reduction since then opened a ‘price war’ is a prelude; January 20, 1998, Santana Normal price cuts 20,000 yuan, while the previous few days, FAW Jetta price cuts of up to 15,000 yuan. Up to now, still ‘sit back’ and stays on, the remaining Tianjin Xiali and Dongfeng Peugeot Citroen Fukang. For a time, the industry’s dark secret city of cars, everyone smelled - the stock thick smell of gunpowder. So -- Why the major vendors cut prices? Due to the limited nature of the domestic income, making the price of goods for consumers to purchase one of the factors of most concern. For cars this ‘special commodity’, but also for this reason that makes any one brand’s price elasticity of demand for large cars. Suzuki Alto through the repeated price cuts and some related promotional measures (such as installment), so that it can result in lower prices for each ‘sold out’ the boisterous scene; while Santana sharp price cuts are also a straight line, after its sales soared, joy evil ‘Shanghai Volkswagen people’. It is precisely because of the high sensitivity of consumer prices, making a number of manufacturers in the case of weak demand, focusing on the root Jiuming Cao, sought through this ‘a magic’ of the ‘trump card’ foothold in the market. Ever since, the car’s price cuts in turn is a