Major Opportunities for Technology Suppliers

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China Auto Industry

Major Opportunities for Technology Suppliers
Major Opportunities for Technology Suppliers

China has had the world's largest automotive market since 2009, with total sales volume in 2012 reaching 19.3 million units. This represents 4.3 percent year-over-year growth. Of this total unit volume, 15.5 million vehicles sold in China were passenger cars and 3.8 million were commercial vehicles. Industry experts predict that the Chinese auto market will continue to maintain moderate growth over the next three to five years, with sales volume by units growing in the range of 4 to 8 percent annually.
This growth is largely driven by the increasing purchasing power of the growing middle class in China; the relatively low percentage of auto ownership among China's citizens; the relatively high number of older vehicles now on the road requiring replacement; industrial growth; and last but not least, by supportive government policies. While up to now the Chinese auto industry has largely focused on the fast-growing domestic market, several manufacturers have ambitions to increase their export business.

Headwinds for the industry include congestion- and/or pollution-related limits on autos in some cities in China and potential manufacturing overcapacities due to the overall cooling down of the Chinese economy.
According to a report produced by the Chinese Academy of Social Sciences, foreign joint ventures dominate China's auto market. These accounted for 95 percent of passenger vehicle profits in 2011. Also, according to the report, Chinese automakers rely heavily on their foreign partners, which retain tight control over R&D, branding, design, and components.

Posted on July 29, 2013 - (339 views)
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