The Alluring Strategies of Chinese Automakers

Photo by Phương Lâm.

With intense competition from Korean, Japanese, and European automotive brands, car manufacturers from the world’s most populous country have had to devise strategies to attract customers, including promotions and price adjustments.

Premium Pricing, Deep Discounts

In recent times, Chinese automakers have been pricing their new models at a premium, sometimes even beyond the segment they belong to, in an attempt to shed the “cheap and low-quality” image that has plagued their reputation in the Vietnamese market.

However, with the current market challenges and aggressive discounts offered by Japanese, Korean, and American automakers to maintain sales, Chinese vehicles often find themselves in a sluggish sales situation.

After a while, these brands start tweaking their pricing strategies in favor of customers to boost sales. The discounts can go as high as VND 100-200 million.

Haval H6. Photo by Phúc Dương.

Last year, the Haval H6 was initially priced at VND 1.1 billion. Despite its advanced safety features and powerful engine, the price tag above one billion dong failed to attract buyers due to the unfamiliarity of the H6 name.

A few months later, the distributor decided to lower the price to VND 986 million to attract more customers.

A similar strategy was employed by MG for its MG5 model. Introduced in early 2022, the MG5 sedan had a competitive price compared to other vehicles in its segment, ranging from VND 579 million for the highest trim level.

However, due to controversies surrounding its design and identity, the MG5 struggled to maintain high sales figures. To boost sales, MG continuously adjusted the selling price, causing the MG5 to drop below VND 500 million.

MG5 (left) and New MG5 MT (right). Photos by Vũ Huỳnh, Vĩnh Phúc.

Last year, MG launched the MG5 MT variant at VND 399 million, comparable to B-segment sedans. However, similar to its sibling, the MG5 MT also faced price reductions.

Currently, according to Tri Thức – Znews‘s survey, some dealerships are offering the MG5 MT at a price range of VND 315-325 million, even lower than A-segment cars like the Kia Morning (from VND 349 million) or the Hyundai Grand i10 (from VND 360 million).

The MG ZS, a B-segment SUV, also underwent price adjustments. Initially priced at VND 569 million in 2021, it faced sluggish sales and was later discounted to below VND 500 million.

Most recently, in late September, several MG dealerships advertised the ZS with a starting price of VND 384 million for the Std trim and VND 437 million for the Lux trim. This pricing strategy made the MG ZS more affordable than some A-segment SUVs like the Toyota Raize (VND 498 million) or the Kia Sonet (VND 529-634 million).

Significant price reductions have helped boost sales for models like the MG5 and MG ZS, making MG one of the few successful Chinese automotive brands in Vietnam. Other “expensive” models, despite price cuts, are still rarely seen on the roads.

Generous Gifts and Long-term After-sales Services

In addition to price adjustments, Chinese automakers are also offering generous gift packages and extended warranties to attract customers.

When BYD vehicles were launched in Vietnam, they didn’t come with price discounts, but they did offer valuable gift packages that targeted the practical needs of car owners.

For instance, buyers of the Atto 3, Dolphin, and Seal currently receive a charging support package that includes a 2.2 kW mobile charger, a 7 kW wall-mounted charger, a V2L power conversion device, and free installation.

BYD Lineup. Photo by Phúc Dương.

In August, the Omoda and Jaecoo brands, under the Chery group, announced a 10-year or one million km engine warranty for their entire product range in Vietnam.

In the next 1-2 months, as Omoda completes its dealership network, it is expected to start selling its first vehicles in the market.

Offering extended warranties is a strategy employed by Chinese automotive brands to build trust and demonstrate their long-term commitment to the Vietnamese market.

While numerous Chinese automotive brands and models have entered Vietnam, only a few have achieved notable success. Deep discounts and generous gifts do not guarantee a bright future for sales, but they do provide a competitive edge that was lacking before.

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