Chinese car market - both boon and headache

NEW YORK (Fortune) -- With Western markets still struggling to escape the effects of the recession, automakers are increasingly focusing their attention on China -- and rubbing their hands with glee. Car sales in August rose 78% over the same month a year ago, according to J.D. Power Asia Pacific and are running at an annual rate of 14 million units.

Compare that with the U.S. Back before the Cash for Clunkers program kicked in, the car market was chugging along at the rate of a mere nine million units.

But doing business in China still contains plenty of obstacles, as several recent events make clear. Beyond the trade dispute over tires, there are a host of challenges for Western manufacturers, ranging from difficulty in enforcing contracts to maintaining intellectual property rights.

First the good news. China has rebounded resoundingly from the global recession, the effects of the government tax incentives and subsidy policy notwithstanding. For the year, sales are up a robust 32%.

More growth is predicted.

J.D. Power forecasts that Chinese consumers will be buying more than 11.4 million vehicles annually by 2015. The reasoning is simple. The U.S. has about 820 vehicles for every 1,000 people. China today has roughly 34 vehicles per 1,000 people.
The Chinese car market is something of a free-for-all, with more than 90 local and foreign brands offering more than 400 different models. Western manufacturers dominate the list of bestsellers -- Volkswagen is number one -- but independent Chinese makers are moving up fast. Chery ranks seventh, BYD eighth, and Geely is 11th in overall sales.

Cashing in on this bonanza can tax the patience of even the most determined. Entrepreneur Malcolm Bricklin put out a news release to announce that his company had done something usually considered routine: It successfully served a lawsuit on Chery Automobile that it filed more than a year ago. Bricklin complained that Chery "repeatedly avoided service by refusing Federal Express packages containing the legal documents."

Even business people less mercurial than Bricklin find practices in China challenging. Take battery maker A123 Systems (AONE). In a prospectus for an initial public offering, it lays out the risks of operating in China, including "the potential inability to control our operations and relationships; enforce any agreements we have with Chinese partners, to find, retain or train suitable employees and to effectively protect our intellectual property rights."

The risk sections of IPO prospectuses frequently contain scary language, but the paragraphs on China invoke more fears than unusual.


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One Step Further Towards Car Insurance Savings

In response to the hard hits suffered by consumers in the car insurance industry, AutoQuoteNow.com recently launched expansion plans for its insurance section. Researchers for the website have successfully isolated the costs entailed in insuring cars. They have also compiled data on how to conduct effective car insurance comparison, as well as gathered tips and suggestions for high-risk drivers in the industry. These high-risk drivers are the ones suffering the high cost of premiums the most.

It is a given fact that people need to get insurance, as discussed by Daniel I. Tulbovich, the President and CEO of AutoQuoteNow.com. It is just unfortunate that today, consumers all over the world are suffering hard hits due to the global recession. This is precisely why it constantly seeks ways to provide insurance packages to their clients at affordable prices. This way, it helps people make more informed choices when purchasing affordable premiums while still getting complete coverage.

Consumers should always compare not just auto insurance companies but also the quotes that they offer in the market. Interestingly, there is an art to comparing companies and policies, and it is actually in using the right tools that consumers are able to get the most complete coverage at the most affordable price.

Daniel I. Tulbovich shares how he has seen so many consumers accept whatever offer made by the first car insurance company that they find. Moreover, this is most likely because consumers find it a hassle to compare companies and policies. AutoQuoteNow.com capitalizes on the consumers' need to compare insurance packages fast and easy. By providing online access to the tools needed to compare auto insurance quotes, consumers can now make more informed decisions.

Daniel I. Tulbovich further warns that online shopping for car insurance does not necessarily get you the best deal without negotiating for it. Drivers still need to do a bit of negotiating and haggling to get the best deal. Furthermore, drivers should not think that only their driving records are checked by insurers. Insurance companies also check on the type and age of the car, the driver's age, and the driver's job and income status.


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