New Trends Reshape China's Auto Industry
As China's automobile industry has leaped to being one
of the three largest industries in the world, led only
by the US and Japan, new trends in the auto industry are
becoming apparent as it strives to become more competitive
nationally and internationally.
The most apparent trend was the rapid increase in the
number of vehicle's: production in 2003 was 4.44 million
vehicles, which was 2.1 million more than 2001's 2.34
million vehicles.
For the first time, sedans led demand. In 2003, sedans
made up 44.5% of production, up nearly 15% from 2001's
30%.
The market showed signs of greater concentration with
fewer makes and models, which suggests that it is showing
early signs of maturing. In 2003, SAIC,
Dongfeng and other leading makers came to dominate nearly
80% of the market.
With continued strong consumer demand, especially in
China's leading cities, earnings and profits have gone
up considerably.
New models have come out at a rapid-fire pace. It is
estimated that in 2002 and 2003, more than 80 new models
of sedans came out.
Vehicle exports from China have also gone up at a quick
pace. In 2003 vehicle and parts exports were US$4.7 billion,
up 34% over 2002, according to statistics released by
Chinese customs.
The auto industry is currently undergoing reorganization,
with takeovers and mergers favoring the fastest growing
companies. Companies are re-capitalizing and issuing more
shares. Joint ventures are extending terms and length
of their joint venture companies. Major parts companies
such as Visteon
are increasing their presence, and companies which were
not previously in vehicle manufacture such as Chunlan
are also getting into the business.Private capital is
getting involved in the re-organization of state-owned
manufacturers.
Although China has made great progress in the past few
years, it is still very weak in research and development.
Compared to leading American, Japanese and European makers,
the scale of the Chinese auto industry is still small.
When it comes to models, Chinese are still reliant on
leading US, European and Japanese brands. And when it
comes to the retail experience, the general environment
is still far behind that of developed countries.
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