China represents a huge potential market for all kinds of companies — vehicle sales in China grew more than 32% in 2010 to more than 18.1 million (more than in the U.S.). As the average Chinese gains more disposable income, many are in the market for a new car. At the low end of the market — less than 50,000 yuan (about $7500) — three out of four cars sold are domestic Chinese brands. These brands — like the Tianjin FAW Xiali pictured here — don’t have a great reputation for quality. Volkswagen, GM, Nissan, and Honda see an opportunity and are responding with lity with lower cost models. So this is what many of these car makers are trying to do with stripped down variations of traditional models — with new brand names. This article “Foreign Carmakers Try Brands Just for China” (Bloomberg BusinessWeek, March 3, 2011) provides a good example of international product adaptation. The decision to use new brand names — instead of the more well-known Western brand names could also be discussed.
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