Tesla in China
Tesla started selling from March in 2014
As a leader in emerging electric car market, Tesla has already taken a place in the Western auto field. In China, by contrast, its selling rate was stuck, caused by the complicated car delivery process and a brand-name dispute. However, I believe Tesla will have a greater share in Chinese market if it enhances its strength in differentiation, and seizes the opportunity of increasing support from the Chinese government.
Due to Tesla’s relatively high pricing and differentiation-focused strategy, it is “considered by the Chinese to be a brand that rivals other automakers like BMW and Mercedes.”¹ The affluent in China, especially those who are pursuing better environmental standards, are willing to pay a high price for a unique and state-of-art automobile that can help to identify their status and attitudes towards life. And it turns out that Tesla perfectly fits their demand.
Since the economic revolution in China, China has been “the world’s largest auto market.”² With its awful smog problems, the demand of electronic cars and the awareness of improving environmental standards have increased. In July, “China’s State Council agreed to exempt electric cars from the 10 percent tax normally assessed on new auto.”³ Being one of the most successful electric auto companies, Tesla will definitely take the advantage of this action to further penetrate into the Chinese auto field that is occupied by mostly gasoline automobiles currently.
Despite the fact that Tesla is undergoing a slow development in China now, the strength it owns in differentiation and the support it gains from the Chinese government will provide Tesla with a brighter prospective.
Endnote:
1. Michael, Yoshikami. “Why Tesla Will Win in China.” CNBC. Michael Yoshikami, 1 May 2014. Web. 27 Sept. 2014. <http://www.cnbc.com/id/101634065#.>.
2. Einhorn, Bruce. “Tesla in China: Slow Sales Acceleration and a Brand-Name Dispute.”Bloomberg Business Week. Bloomberg, 7 Aug. 2014. Web. 27 Sept. 2014.<http://www.businessweek.com/articles/2014-08-07/tesla-in-china-starting-sales-slowly-winning-brand-name-dispute>.
3. Refer to endnote 1.
Picture reference:
Retrieved from <http://stocksmarket.in/146552/2014/02/19/will-teslas-bet-on-china-pay-off/>.
Article Reference:
Einhorn, Bruce. “Tesla in China: Slow Sales Acceleration and a Brand-Name Dispute.”Bloomberg Business Week. Bloomberg, 7 Aug. 2014. Web. 27 Sept. 2014. <http://www.businessweek.com/articles/2014-08-07/tesla-in-china-starting-sales-slowly-winning-brand-name-dispute>.
Michael, Yoshikami. “Why Tesla Will Win in China.” CNBC. Michael Yoshikami, 1 May 2014. Web. 27 Sept. 2014. <http://www.cnbc.com/id/101634065#.>.
“Porter’s Generic Strategies.” Porter’s Generic Strategies. Web. 27 Sept. 2014. <http://www.quickmba.com/strategy/generic.shtml>.
“SWOT Analysis.” SWOT Analysis. Web. 27 Sept. 2014 <http://www.quickmba.com/strategy/swot/>.
Read More:
Definition of “Differentiation-focused strategy”: <http://catalog.flatworldknowledge.com/bookhub/reader/3085?e=ketchen_1.0-ch05_s04>.
Tesla’s official website: <http://www.teslamotors.com/>.