. When Chinese automakers began exporting cars, rather thanfocusing on developed nations in the West, they shippedautos to emerging markets in countries such as Algeria, Russia,Chile, and South Africa. In these markets, even used vehiclesfrom multinational manufacturers are relatively scarce—andrelatively expensive. The Chinese automakers, who prioritizelow cost rather than design or even safety, applied a penetration-pricing strategy. A woman in Santiago, Chile, who boughta new Chery S21 explained, “The price factor is fairly decisive.I paid $5,500 new and full. Toyota with similar features costsaround $12,000.” Why do you think Chinese automakerschose that pricing strategy? Do you think it was successful?As Chinese regulators pressure these manufacturers to maketheir cars safer, do you think they will be able to keep theirprices low compared with those of the international automakers? Why or why not?26
. When Chinese automakers began exporting cars, rather than
focusing on developed nations in the West, they shipped
autos to emerging markets in countries such as Algeria, Russia,
Chile, and South Africa. In these markets, even used vehicles
from multinational manufacturers are relatively scarce—and
relatively expensive. The Chinese automakers, who prioritize
low cost rather than design or even safety, applied a penetration-pricing strategy. A woman in Santiago, Chile, who bought
a new Chery S21 explained, “The price factor is fairly decisive.
I paid $5,500 new and full. Toyota with similar features costs
around $12,000.” Why do you think Chinese automakers
chose that pricing strategy? Do you think it was successful?
As Chinese regulators pressure these manufacturers to make
their cars safer, do you think they will be able to keep their
prices low compared with those of the international automakers? Why or why not?26
Step by step
Solved in 2 steps
