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CHINA: "China Automotive Monthly: Executive Summary - March 2010". 6-page Executive Summary by J.D. Power and Associates.
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backCHINAtalk July, 2008
Driving forces in China's car market
China`s passenger car market continues to expand vigorously. Both sales and production rose by more than 20 percent in the first ten months of 2007, albeit not quite at the same rate as 2006, when both rose by more than 30 percent. The overall strong growth, however, masks much of what is going on in a highly dynamic market, the most significant development being the rise of domestic car making. Companies continue to compete fiercely on price, although this may change as the inflationary pressures currently impacting the economy become increasingly apparent.
With annual passenger car sales of just under 4 million last year, and above 5 million this year, the industry is still far from mature. Indeed, this makes its achievements all the more remarkable. In 990, only 42,000 cars were made in China. And it was only in 994 that the government designated the automotive industry a “pillar†industry of the national economy. Foreign investment, which had been present since the late 980s, was further encouraged, particularly from Germany`s Volkswagen and then the US`s General Motors, which resulted by 2005 in output and sales being dominated by some dozen or so foreign-invested joint ventures.
For the government, the principal benefits of a strong car industry lie in its overall contribution to economic development, raising demand for everything from steel and tempered glass to tyres and petroleum products. The overall growth of the industry, however, has led in particular to the establishment of a major components production network. It has also enabled the development of a handful of independent domestic car makers, which have grown even faster than their international counterparts.
To download 20-page report, please click here.
Source: KPMG International - GAI
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