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Strategies & Market Trends : China Warehouse- More Than Crockery
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To: RealMuLan who wrote (1999)12/15/2003 1:23:33 PM
From: RealMuLan  Read Replies (1) of 6370
 
CARS IN CHINA: Despite regulations, a vast opportunity for industry

December 15, 2003

With almost four times as many people as the United States, China has less than 10 percent as many cars and trucks. Less than 1 percent of China's 1.2 billion people own motor vehicles. Auto production in China is expected to reach 4.3 million vehicles this year, fewer than a quarter of the vehicles that will be sold in America.

But as its economy grows, so does China's demand for personal transportation; auto sales are rising a remarkable 50-60 percent a year there, and people are waiting months for vehicles.

China will soon surpass Germany as the world's third-largest automotive market, and it is on pace to overtake Japan within five years to be No. 2. Ford and General Motors are selling everything they can build in China and undertaking big plant expansions. The Chinese recently relaxed their rules on auto imports to help car companies meet demand. Compared to the nearly saturated markets of America and western Europe, China is a land of boundless opportunities for the folks who sell cars and trucks.

But there are issues looming. China wants and needs cars and trucks, but not just any cars and trucks.
The Chinese government, which already insists that foreign car companies partner with Chinese manufacturers, is also setting strict mileage standards for vehicles sold in China -- stricter than the U.S. government has been willing to impose. The Chinese are obviously wary of becoming as dependent as the Americans are on foreign oil. China now imports a third of its oil. The United States brings in more than half its needs. The new standards also appear to be China's attempt to make sure that foreign producers share their latest technology -- such as hybrid engines and hydrogen-powered fuel-cell vehicles -- with their Chinese partners.
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