China's Automotive Industry (Automotive Industry in Emerging by Mark Norcliffe

By Mark Norcliffe

Researched and written by means of the top of the overseas division of the Society of Motor brands and investors, this in-depth file analyses the tendencies and customers for the automobile in China. It offers an authoritative industry assessment and research of industry info, developments, financial system, govt coverage, geographical elements. It then appears intimately on the Passenger automobile area, the economic automobile region and the parts quarter - in every one case supplying research of key avid gamers, their operations, marketplace proportion, concepts, most probably destiny successes and screw ups. ultimately the file assesses China's car from a comparative worldwide viewpoint.

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New import regulations introduced in 2005 have prompted a rapid expansion in the local production of sophisticated systems, particularly transmissions and complete powertrains. Automotive air-conditioning production has also soared, reflecting the 42 increased comfort levels expected by Chinese consumers. The major international players The Europeans With VW dominating early vehicle production in China, it was natural that German component makers and other European suppliers to VW should be among the first entrants into the market.

There are a further six companies (DMC, FAW, JAC, Jiangling Motors Group, Yuejin Motor Group and Qingling Motor Co) each producing around 30,000 units per annum. Predominantly, their models are based upon Japanese technology, although, in this sector too, Korean-based products are starting to appear. Great Wall Motors from Hebei Province is a recent arrival that continues to make steady inroads. However, within the light truck sector, increasing sales have not been matched by higher profits. Qingling Motor Co, for example, recorded a 50 per cent profit fall in 2004.

When the international vehicle manufacturers first came to China, they found that the vertically integrated supply chains of their joint venture partners were wholly unable to produce the components that they required. However, they were obliged by the central government to source a percentage (generally, at the outset, 40 per cent) of components locally. They addressed this problem by encouraging or coercing existing suppliers to set up manufacturing facilities in China. Generally, the component makers judged it prudent to comply with the wishes of their existing customers.

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