Leading Japanese carmakers Toyota and Honda are planning to catch up with Chinese home grown companies for a bigger market share. According to reports, both these companies posted a growth of 21%and 23% in China in the year 2009.

But their overall growth is much lesser than the overall market which grew by around 46%. These companies lack small and economical cars which are popular in rural and interior parts of China. These cars are preferred by first time car buyers, who focus more on value than on brand, according to auto experts.

China is becoming the battle ground for leading auto companies around the world. It became the largest car market and overtook U. S. last year in car sales. It further assumes importance, as global slowdown has impacted sales of both these Japanese companies in U. S. and Europe.

The compact car market was bolstered last year, by a tax deduction for vehicles with a capacity of 1.6 liter engine or less. The rural or inland areas accounted for around 54% of total car sales, according to reports.

Auto experts point that the average selling price of cars offered by these Japanese companies is about CNY90, 000 or more. This price has to come down to around CNY70, 000 or less if these two car makers want to make a serious impact on the Chinese market.

Experts point out that a way to reduce costs is to source more components from Chinese component makers. Both the companies are planning to launch more low cost models in the coming days to better compete in the Chinese market.