asks Rémy Pothet, Global Sector Head at TNS Automotive.
China has successfully established itself as leading producer and buyer in the automotive market worldwide, transforming the automotive leader board in less than 20 years. But this is just the beginning!
China’s automotive industry is still in its infancy
The rate of car ownership in China is less than 25 cars per 1000 inhabitants, compared to 500-600 in mature markets! 18 million vehicles sold in 2010 of which 70% were first time buyers! There is still huge potential for further growth as those living in lower tiered cities all aspire to buying a car as soon as possible.
Local players haven’t yet “gone global”
It is incredible to think that China is already market leader globally although its domestic manufacturers haven’t yet broken into other continents. Of course, there are joint ventures which are getting stronger and stronger (the likes of SAIC, FAW or SAW (Dong Feng) or ambitious 100% Chinese companies like Geely, BYD, or Chery) but none of them have become world players - yet. It’s only a matter of time, and then the world will be their oyster! But for now the Chinese automotive industry remains very fragmented and dependent on “foreign” companies.
So what’s in store in the next 20 years?
Could China reinvent the global automotive industry model? My opinion? I would say that China will be forced to do so if it wants to truly lead the global automotive industry, continue to develop its economy and meet such exceptional domestic demand potential!
Challenges such as the rise in fuel prices, congestion in major cities and increasing awareness of pollution will add extra pressure to reinvent the model and leave China with no choice but to take the lead in development of clean alternative fuel vehicles.
The industry has changed rapidly in the last 20 years, but this is a drop in the ocean compared to the changes ahead for the next 20!
Watch this space for further consolidation, Chinese players going global, vehicles bought online, new innovative driving experiences - and much more…
Yeah, yeah.yeah. China is almost everywhere, is there no China thing at your home? Guess not. Automarket has also been occupied by China. It captured it with quantaty but not with quality
Posted by: casino | 13/07/2011 at 11:01 AM
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Posted by: oakley frogskins | 01/06/2012 at 02:41 AM
Domestic automakers have been hit hardest as their profit margins have been shrinking due to rising costs and intense competition on prices.
Posted by: sourceautomotive.biz | 27/06/2012 at 04:21 PM