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Automotive in China -
11-06-2005, 05:24 PM
2004 White Paper - Automotive
The automotive industry has developed rapidly as China has targeted the sector as one of the country's key pillar industries. In 2003, total passenger car production rose 85 percent to more than 2 million units, while total vehicle production hit 4.4 million, a jump of 37 percent. For 2004, estimates predict that domestic production will total 5.7 million vehicles, a year-on-year increase of almost 30 percent. Moreover, China is expected in several years to overtake Japan to become the world's second largest auto market.
China has become a vital location in the production and sales channels for U.S. automakers and parts and components manufacturers. This relationship is certain to grow, as evidenced by recent well-publicized cases of multi-billion-dollar investments in manufacturing facilities. While this new production capacity is targeted principally towards the Chinese market, the flow of products into the U.S. market is expected to accelerate as cooperative relationships expand. U.S. imports of Chinese auto parts are estimated to have doubled in the past three years, reaching US$2.8 billion in 2003.
The development of the auto industry in China offers opportunities for foreign investors far beyond the manufacture of cars, trucks, buses, motorcycles, and specialty vehicles. A wide range of suppliers will also benefit, such as steel, rubber, electronics, and parts and component makers. Related service industries, such as auto maintenance and financing, enjoy new opportunities. Taking a broader view, the growth of the auto industry will spur additional growth in the road construction and energy industries. The lifestyle changes that will result from car ownership will also create increased demand for entertainment and recreation.
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