Car dealers scramble to change the car market
The upcoming taxi replacement initiative in Beijing is set to create massive opportunities for automakers, sparking a fierce competition among industry players. According to industry insiders, over a dozen major manufacturers—including Shanghai Volkswagen, Dongfeng Citroen, FAW-Volkswagen, Beijing Hyundai, Chery, Changan Ford, and others—have either openly or subtly expressed their intention to participate in the new taxi procurement process.
With an estimated number of taxis to be replaced ranging from 35,000 to 50,000, the financial potential is staggering. At a conservative price of 110,000 yuan per vehicle, this could translate into over 3.85 billion yuan in sales. Although taxi profits may seem slim on a per-unit basis, the volume ensures substantial returns. With a minimum of 1,000 yuan profit per car, the total could reach 35 million yuan, potentially doubling to 70 million if the numbers are higher.
Taxis have a shorter service life—typically 6 to 8 years—and are then forcibly retired, creating a continuous demand for replacements. This means that once a manufacturer secures a position in this market, it can enjoy long-term stability. Additionally, the high usage rate of taxis leads to significant maintenance and repair costs annually. This presents not only an opportunity for initial sales but also ongoing revenue through spare parts and after-sales services.
Beyond the financial gains, the advertising value of having a car model featured in Beijing’s taxi fleet is enormous. As a key part of the city’s transportation system, taxis serve as mobile billboards, offering automakers unprecedented brand visibility. The government’s upcoming standards will likely play a crucial role in determining which models are selected, making the taxi companies and their decision-makers highly sought-after targets for public relations efforts.
Automakers have been actively engaging with taxi operators through test drives, seminars, and factory visits. For instance, Shanghai Volkswagen invited leaders from over 20 Beijing-based taxi companies to tour its facilities last year. In March, Chery organized test drives for more than 50 drivers and arranged for over 70 taxis to be showcased in Beijing. Company representatives also visited production sites in Anhui to strengthen relationships.
Even before the official standards are released, manufacturers are already working hard to align their products with potential requirements. Many are developing specialized taxi models tailored to features such as built-in meters and GPS systems. Dongfeng Citroën, which holds one-third of the market share in Beijing, has been focusing on maintaining strong customer service for its 20,000+ taxi clients, conducting follow-ups and training sessions. It is also preparing for future specifications that the government may impose.
As the competition intensifies, the race for the Beijing taxi contract is becoming one of the most significant battlegrounds in the automotive industry.
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