Price wars have taken a toll on the quality of domestically-made cars with defects reported in 77 percent during the first six months of ownership, according to the latest market survey.

 

The 2006 China Automobile Customer Satisfaction Index (CACSI) said major defects involved tyres, air conditioning and braking systems, locks and steering wheels.

 

For every 100 new cars there was an average of 338 defects, a big rise from last year's 246.

 

The China Consumers' Association received 1,038 complaints in the first three quarters of the year, which is up 21 percent from 2005. In the third quarter the number was 44 percent higher than that of the second quarter.  

 

Experts say price cuts, which have averaged about 10,000 yuan (US$1,250) annually in the past few years have forced manufacturers to purchase lower-grade parts in an effort to cut costs. "The defects are a result of carmakers constantly reducing prices and sacrificing quality," said Fan Tianshun, director of the customer affairs office of the China Quality Association. They conducted the CACSI survey.

 

Making matters worse is the shortened product launch cycle. For example this year alone over 100 models have been or will be launched.

 

"With shorter research, development and testing periods, the new models will, of course, have more defects," Fan said.

 

In the first 10 months more than 3 million cars were sold, according to statistics from the China Automobile Industry Association. Last year there was an average of 3.4 cars per 100 families in China. This is an annualized increase of 45.9 percent from 2003.

 

However, many domestic consumers still go by price and appearance. "People first think of 'owning' a car, then 'enjoy' its performance," Fan said.

 

"I recommend car producers not to grab market share simply by lowering prices," Fan said. "Such competition strategies will hinder their sustainable development in the long run."

 

The CACSI poll was based on 4,648 participants in 36 cities in 25 provinces. The 16 major domestic brands surveyed accounted for 72 percent of all cars sold in China last year.  

 

Though defects have increased by a large percentage this year's customer satisfaction index has risen 0.1 percent from last year. The improvement was mainly seen among cars, whose prices ranged from 50,000 yuan (US$ 6,250) to 100,000 yuan (US$12,500).  

 

"Cars within this price range were some years ago sold at about 50,000 yuan higher," Fan said.

 

Jetta of First Automobile Works-Volkswagen, which ranked first in customer satisfaction, sold more than 140,000 units in the first 10 months of the year.

 

Geely, whose cars are mainly priced from 30,000 yuan (US$3,750) to 50,000 yuan each, had the least customer satisfaction. Others drawing negative comments included Chery QQ and Changan Alto.

 

(China Daily November 20, 2006)