Another shift in the market has been increasing competition both locally and internationally.
Local producers like Chang An, Dong Feng, Geely, Great Wall, BYD and others have begun to make a name for themselves in the Chinese market. While their brands cannot be compared to automobile giants like Toyota, Volkswagen or Ford, they have been steadily gaining market share to 22%. However, the market share is closer to 50% when including all motor vehicles from trucks to buses to two/three wheelers. On top of this, foreign automobiles have to endure an import tax, consumer tax and value-added tax, causing their vehicles to be 1.5 to 2.5 times more expensive than in the West. This ensures that only the upper middle class and upper class citizens can afford them, while the working class which comprises the majority of the roughly 1.4 billion person nation, tend to target the local brands.
Finally, the growth ratio of the automobile market has begun to show signs of regression, with a current growth ratio of roughly 7.4% (KPMG, 2014)
The market has begun to saturate, as the young generation slowly loses interest in owning a vehicle, and the second hand car market grows at an alarming rate. In fact, a large portion of the vehicles produced in China today, are not sold in China but instead in neighboring countries. At the same time, India and South East Asia are growing at a double digit growth ratio alongside other trends such as urbanization and increase in standard of living. Because of this, multinationals such as Toyota have begun developing production centers in Thailand, while Ford has begun to focus on production in Mexico so a trend is clearly unfolding.