Thursday, February 6, 2014

Carmaker Tesla WINS China fans with "fair" pricing strategy

Carmaker Tesla WINS China fans with
In China, where higher prices mean prestige luxury can US electric carmaker Tesla a bold step win win the markup, which some of his competitors only half by taking customers and cachet command.

Although it runs the risk of downs, Tesla's marketing strategy could be a model for other imported its brand at a lower level brands, the Chinese State-run media and regulatory authorities demolish shopper for allegedly with inflated prices under fire came.

An unusual blog post detailing last month of lower-than-expected 734.000 yuan ($121.400) China price for its higher-end model S electric car company. The price still 50 percent higher than in the United States includes only "inevitable" taxes and transport costs, it said.

"If we industry practices to follow, could we S come with the charge twice as much for the model in China, as we in the United States. But we are different things,"Tesla's blog said on 22 January, written for the consumer by popular Chinese social media channels.

The blog with the title "A fair price", drew overwhelming support from China's active netizens are. A reader survey on popular site, which more than 80,000 votes, showed that 90 percent of consumers move the U.S. carmaker supports.

Analysts said lower pricing strategy premium could deter segment buyers ensuring additional typically want to spend quality and cachet.

"Price transparency helps out, because people see that as being different, but lower price itself, I see no great influence," said Andreas Garcia, Shanghai-based principal focus consultancy a.t. Kearney. automotive.

Automakers charge often steep premiums in China. Daimler-high-end Mercedes-Benz SLS AMG model costs 3.1 million Yuan ($509.000) in China, according to its local site, 150 percent higher than the starting price in the United States. Volkswagen Audi TT Coupe costs 519,000 yuan ($85.800) in China, about twice the U.S. starting price.

While other car companies already offer price discounts to lure buyers with China, Tesla is the first, a clear statement to charge the Chinese buyer, the same as in overseas markets, transparency in a nice marketing ploy.

"Not just the pricing strategy, but rather to show it, like the communication with Chinese consumers during one pricing is transparent world", said Shawn Wu, Shanghai-based project manager at the consultancy of SmithStreetSolutions.

Last year, Tesla's total car sales were approximately 22,500, especially in the United States. The California based company plans, shops in 10 to 12 Chinese cities open until late 2014 says that he expects that China one-third the sales growth this year to.

Risky game

Foreign manufacturers of products made of milk powder and hand bags have traditionally been steep premiums for high end products in China, where the price is often closely linked to quality and prestige.

But with more attention from State media and increasingly conscious buyers, consumers unhappy with artificially high prices, grew, Oceanne Zhang, head of said market insights for consultant Kantar retail in Shanghai.

"prices you can only abroad or travel abroad and they realize that what they pay extra, is no premium on other markets. It's only a bonus payment in China, "she said.

Companies, including US retailer Wal-Mart stores and Starbucks Coffee House have attracted attention due to their high prices of Chinese State television and regulators.

China Central television (CCTV) in the sights taken has international automotive manufacturer for the high prices. A report in December singled out companies such as Audi and Jaguar Land Rover, owned by India's Tata Motors.

Imported milk powder companies nutrition, Danone and New Zealand have also come in focus about their high prices with Mead Johnson dairy Fonterra Co-operative Group, which included all last year under the microscope.

Tesla's strategy, she hopes, breaks the form of the high pricing of imported products, said Veronica Wu, Tesla's new head of China operations, which the California joined-based carmaker in December of tech giant Apple.

"I hope it will. I think that it is the right thing", said for the first time in China, Wu in Tesla's flagship store in Beijing who last year opened for business at the end. High prices asked CCTV to say that the market had become a "treasure Bowl" for global automakers last year.

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