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China’s Car Market – Globalisation and Consolidation

Even as head into 2011 their worth taking a quick peek at the condition of the world’s speediest growing automotive marketplace. China and tiawan has a target better than 50% of vehicles bought from the country to be domestically produced by 2015, the most recent twelve-monthly figures from 2009 show that over 44% are already so this isn’t a remarkable shift rather an expression of the need to become more and more self-sufficient also to commence concentrating the economy internally in parallel with the existing exterior economy. Mega Feiro

One of the most amazing things about China’s current production is that there are over 130 companies in the country producing motor vehicles! Most of these of course are small size operations, with sales and orders of fewer than 10, 000 units yearly. There are five big players already established from these 130 with sales in excess of one particular million cars per season. 

As the marketplace matures is actually almost sure that the industry will follow a recognised pattern from more older market places, and commence a procedure of loan combination.

There have been moves in the last couple of years with companies like Chang’an Motor Corp making moves for (and taking over) two small sedan producers. Chang’an is the country’s fourth major developer and also represents Ford producer as part of a worldwide partnership arrangement.

The Guangzhou Automobile Group Corp, found themselves buying a minority share in a Shanghai based SUV producer and moving on to become the 6th biggest manufacturer of vehicles.

The expectation of policy manufacturers is that these and other similar deals will lead to a highly consolidated automotive sector by 2012 with potentially 2 or 3 mega groupings representing, 5 or 6th massive manufacturers all with sales in excess of a million units every year.

Traditionally the globalisation factor of China’s car sector has involved relationship deals with major manufacturers from around the world, with China producing old models under their own brands. This really is likely to change as the sector commences to flex their financial clout and hard-earned experience, with the takeover of Volvo by the Chinese Geely group articulating how much a global financial crisis has tips local firms.

There is already speculation that the unnamed buyer from the region is in negotiation for the now defunct Hummer brand and is likely to resurrect it using the location of Dalian (which is pursuing county investment in large scale auto manufacturing) to give attention to the luxurious sector in China.

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