Analysis of The Chinese Car Industry

The DongFeng D120 - Flagship Chinese designed and built car

The Chinese car market is the second largest in the world. It producing over 7,189,000 motor vehicles in 2006, making it the third largest producer in the world surpassing Germany and only behind Japan and the United States.

A large reason for the size of there market it the demand for automotive parts, services and after-care products. Aswell as joint ventures with companies such as: Toyota, Nissan, Honda, Suzuki, Mazda, Daihatsu, Mitsubishi, Fiat, Isuzu, Ford, General Motors, Peurgeot-Citroen and Volkswagen.

Since 2002, 50% of all motor vehicles in China had been produced by individuals, and the total output value of the market for three quarters of 2006 was $143 Billion (USD).

In recent years China has been looking into the production of fuel efficient and alternative fueled vehicles. This year (2009) Bejing will be the first city to require GUO IV emission standards. These advances have lead to a priority in research and development on electric and hybrid cars.

Toyota is the only company in China making Hybrids selling 2,000 in 2006.


The badges of a number of manufacturers in China


The Chinese Automotive Industry Forecast (2006 – 2010):

KEY FINDINGS:

- China’s motor vehicle production and sales increased by 27.32% and 25% over the year 2005 respectively and sales crossed 7 Million Units in 2006.

- China's car consumption showed a CAGR of 54.42% from 2001 to 2005.

- Per 1000 people passenger car penetration of China was around 11 units in 2006. This was significantly lower than other countries.

- Despite the squeezing pollution regulations, the motorcycle production and sales surpassed 21 Million Units mark in 2006.

- Per capita GDP (which is an indicator of the purchasing power) of China has risen steadily. It was less than US$ 1000 in the year 1991 and was around US$ 7600 in 2006.

China Automotive Market

In the past five years, precisely after its accession to the World Trade Organization (WTO) in 2001, China’s automotive industry has seen a phenomenal growth. This growth was coming from a country with a steadily growing economy since the last 15 years and a vast consumer base. Currently, China is the second largest automotive market after Japan and third largest automotive producing market in the world.

Key Players

This section gives an overview of the domestic and international players in the China Auto Industry on the basis of the market capitalization and sales. The main key players discussed in the report are: Volkswagen, Mazda, Nissan Motor Company Ltd., Honda, General Motors, Hyundai Motor Company, Toyota, Suzuki, Geely Automobile Holdings Ltd., Tianjin Faw Xiali Automobile Co., Ltd., Dongfeng Motor Group Co. Ltd.