Market Analysis on Luxurious Coaches in the First 10 Months of 2011 Ⅳ

③ Under the strong influence of the High Speed Rail and motor train unit, the 2011 luxury road coach market capacity was surplus which commonly existed. According to investigation, under normal circumstances, the empty carrying rate of the coach company was around 50%, compared to the empty carrying rate of the above 300 km haul distance be more than 60% which meant that the coach market with more cars but less tourists, and nearly half of the coach company capacity existed excess phenomenon. So the management benefit of passenger transport business operators was less and less, and their fierce and malignant competition increased, especially the price war was naked to be seen clearly. So Chinese government and local government had issued some rules to restrict the passenger transportation market which resulted in the individual buyers decreasing than before. Under such circumstance, the luxurious coaches valuing RMB 0.9 million market was obviously impacted and decreased.

④ A variety of long distance transportation tools co-exist which resulted in the supply outnumber the demand and the fierce competition between them. Under such circumstance, that the speed acceleration of the train, the railway extension, the increase of the motor train unit, the air tickets on sale and more and more long distance passenger transportation tools for the passengers choosing from, the market benefit decline of the luxurious coach market was inevitable.

⑤ The rising oil prices made the cost of the passenger transportation increased and it also restrained the luxurious coach market development. It is seen that the rising of the fuel costs impacted high way passenger transportation obviously. With the oil rising, the cost of the purchase coaches increased which resulted that the final cost would depend on the coach enterprises to provide. So for the coach enterprises, the management cost and risk increased which brought the luxurious coach market some adverse influences, but the negative effect to luxurious coach market was less than mid and lower standard coaches.

⑥ The high risks of managing luxurious coaches also existed that was the main reason restricted the luxurious coaches market demand. There are some difficulties in the market of luxurious coaches valuing RMB 0.9 million showing below:

Firstly, the investment cost of the operation lines increased and it is known that a gold line investment costs is even a few times more than the investment cost of the coaches, and now the growth stage of the investment has passed.

Secondly, according to Chinese laws and regulations, serviceable life and discarding period have been shortened with the use-cost increasing. The gradually rising personnel salary made labor cost increased so the profit of the coach company decreased.

⑦ With luxurious coach business operator strengthens its bargaining power, so the buyers would be cautious and rational when is in the face of various brands temptation. On one hand, it is the relative surplus products, on the one hand, it is slack demand of the market and the customer bargaining power getting unprecedented strengthen, so the clients always hope to get more affordable tangible benefits through comparing the competition to reduce the risk of operating. Clients’ potential bargaining power great compressed the business profits space, so the price competition becomes the main measure of the market competition which makes the competitiveness of the luxurious coaches become weak, thus it makes the market competition becomes more cruel.

⑧ There is no such big event in 2011, such as 2010 Shanghai World Expo and Asian Games in Guangzhou that promote the growth of luxurious coach market which inevitably affects the growth of luxurious coach in the first 10 months of 2011.

Part five：Conclusion

1. The sales of the luxurious coaches valuing over RMB 0.9 million in the first 10 months of 2011 increases by 12.05% compared to that of 2010 but the sales growth dropped nearly 30% compared to that of 2010.

2. In the luxurious coaches market of Jan.- Oct. 2011, the sales of the coaches valuing among RMB 0.9-1.5 million is growing along with the overall growth of the coach market. The market capacity of luxurious coaches valuing over RMB 0.9 million is still the largest one, which also in the inertia development rule for the nearly five years. Since 2007-2011, except 2009, although it shows some certain growth but the capacity of market demand is limited which is because the purchasing power of the market management and rate of returning.

3.In luxurious coach market, the sales of luxurious coaches valuing RMB 1.5~ 2.0 million in recent years is growing with the overall market growth. The market capacity of luxurious coaches valuing over RMB 0.9 million is still the second largest one which also in the inertia development rule in the nearly five years. Although it shows some certain growth in the nearly five years except 2009, but the capacity of market demand is limited which is because the purchasing power of the market management and rate of returning.

4. In luxurious coach market, the sales of luxurious coaches valuing RMB 2.0 million decreased which is different from the overall coach market. The market capacity of luxurious coaches valuing over RMB 0.9 million is still the smallest one which also in the inertia development rule in the nearly five years. The market capacity of luxurious coaches is inversely proportional to its prices. The higher the price is, the smaller the market capacity of luxurious coaches, vice versa. Although it shows some certain growth in the recent five years but the capacity of market demand is limited which is because the purchasing power of the market management and rate of returning.

5. In Guangdong market, the sales of luxurious coaches valuing over RMB 0.9 million in the ten months of 2011 was the biggest one, followed by Zhejiang, Jiangsu and Shandong. Based on the regional market demand, the enterprises that produce and sell luxurious coaches can distribute the resources in production and sales and make the corresponding luxurious coach marketing strategy.

6. The influence of High-speed rail competition on luxurious coach market has gradually revealed, but for the different price coaches, the influence degree is different. Among them, the biggest one is the luxurious coaches valuing over RMB 2.0 million markets, then the luxurious coaches valuing among RMB 1.5-2.0 million markets. And the minimum one is the luxurious coaches valuing among RMB 0.9-1.5 million markets. It is seen that in the luxurious coach market, the higher the price is, the more sensitive competition towards the High-speed rail is.