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China AutoBook Preview

Jan 06, 2017

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Automotive

uli-kaiser

  • ChinaAutoBook2017

    PREVIEW

  • ii

    WELCOME!China is the worlds largest automobile market, both in terms of production and consumption.

    In 2015, the country produced approximately 24.5 million units and sold around 24.6 million units domestically. This sales number account for more than half of the vehicles sold in Asia, Oceania and Middle-East combined (43.9 million units).

    Chinas global share on new vehicle production has also been increasing year after year from 3.5% in 2000 to around 25.5% in 2015. In 2014, the sales volume of Chinese automobiles has increased 6.9% from 2013 to 23.5 million cars and eventually to the current 24 million plus.

    Nevertheless, the Chinese government intended slowdown of its economic expansion have reduced the demand for cars where the domestic sales expansion of 4.7% (21.1 million units) in 2015 represents the industry slowest sales growth in three years.

    The government backed China Association of Automobile Manufacturers (CAAM), however, is still optimistic. Because of the latest government sales tax reduction, they expect China total vehicle sales to rise about 6% to 26 million cars this year.

    The strongest growing segments in China are SUVs and MPVs. According to CAAM, the production and sales of new energy vehicles is currently enjoying strong growth with 25,246 units produced and 22,936 units sold (March 2016). This represents an increase of 54.8% and 46% when compared to last year.

    China represents a vast opportunity for the auto industry and if you want to learn more about it in detail then this e-book is the perfect place to start.

    Outsourcing, localization and business developmentThe information was compiled from personal research, the internet and support of friends at automotive companies, automotive organizations, industrial estates and business associates and is intended to support:

    1) Business Development - managers who seek to identify potential customers and sales opportunities in Chinas automotive industry.

    2) Outsourcing local and international commodity managers, buyers who are looking to source automotive components from China.

    3) Localization international managers desiring to expand their market and set up a footprint in China either for distribution or local production.

    Focus on contactsTo make your work easier, the China AutoBook features QuickLinks to access web sites, Google Maps locations and social media sites of the featured companies and their representatives. Simply click on the following icons to connect:

    I am sure this book will give you lots of information and enable you to do more business in China.

    Radolfzell, January 2017

    Ulrich KaiserPublisher

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  • Chapter 1

    Introduction

  • ChinaCurrently, domestic production accounts for more than 90% of the total motor vehicle market share. Domestically produced trucks basically meet market demand in terms of variety and quantity. The previous high disparity between supply and demand in the passenger car sector has been largely relieved.

    China passenger car production has reached 21.1 million units in 2015 while the

    production of commercial vehicles has reached 3.4 million which combined to the total production number of around 24.5 million units last year.

    The production number represents an increased of 3.3% when compared to 23.7 million units that were produced in China in 2014. Chinas production number dwarfed the number of the second largest car producer in the world, the United States, which managed around 12.1 million units in 2015.

    Meanwhile, Chinas total car sales has reached new high and expanded by 4.7%, despite the slowdown of its economy, from around 23.5 million to about 24.6 million units in 2015. Last year 4.7% car production growth has has beaten analyst expectations of 3%, however, the expansion is still the slowest in three year. In comparison, auto sales grew 5.7% to 17.5 million unitsin the U.S. last year.

    China vehicle makers sold 21.1 million passenger cars last year, up 7.3% from a year earlier and the growth compares a 10% rise in 2014 and a 16% expansion in 2013.

    Section 1

    AT A GLANCE

    1. The auto industry is highly protected by the government.

    2. The prefer segments are currently sports utility vehicle (SUVs), multipurpose vehicles (MPVs), and small engine cars due to government favorable policies.

    3. Largely dominated by state owned enterprise (SOEs).

    4. Domestic brands are gaining more popularity.

    5. A large part of the industry still rely heavily on the import of technologies and know how.

    6. Comparatively low vehicle penetration rate of about 115 vehicles per 1,000 inhabitants versus 800 per 1,000 in the United States.

    China Introduction

    Page 5

    Year Passenger CarCommercial

    Vehicle

    Total (million units)

    produced

    2013 18.1 4.0 22.1

    2014 19.9 3.8 23.7

    2015 21.1 3.4 24.5

    2016 (Forecast) 22.8 3.2 26

  • The China Association of Automobile Manufacturers (CAAM), the main industry group for the Chinese automotive industry, has predicted that passenger car sales would expand by 7.8% to 22.8 million vehicles in 2016, helped by government purchase incentives for electric and small cars. The latter make up nearly 70% of new-car sales.

    The group has, however, warned that the halving of the 10% purchase tax to 5% in October last year could prompt car shoppers to buy now and eventually lower car sales in 2017 if there is no new source of growth while the domestic economy continue to slowdown.

    The CAAM sales projected that China total car sales growth will expand by 6% to 26 million units in 2016.

    Meanwhile, the World Bank Group predicted that Chinas gross domestic products will expand by 6.7% in 2016 when compares to 7.3% and 6.9% in 2014 and 2015 respectively.

    On the latest news, China sold 6.53 million vehicles in the first quarter of 2016 which represents an increase of 6% when compared year on year. A total of 2.44 million cars were sold in March, a 54.3% surge from February and an 8.8% rise from the same month last year.

    Experts said the March performance is usually much better than in February because the weeklong Spring Festival often falls in February and people rarely buy cars during the festival.

    CAAM said the sales in the first quarter are an indicator of consumer demand that was contained in preceding months, and the trend would continue for some time to come.

    CAAM expects the growth rate this year to reach about 6% owing to the enthusiasm of Chinese for sport utility vehicles (SUVs) and the government's favorable policies for small-engine cars. A total of 1.96 million SUVs were sold in the first quarter, a 51.5% surge year-on-year and a continuation of the sales momentum seen last year.

    Page 6

    China

    USA

    Japan

    Germany

    South Korea

    India

    Mexico

    Spain

    Brazil

    Canada

    0 5 10 15 20 25 30

    2.3

    2.4

    2.7

    3.6

    4.1

    4.6

    6

    9.3

    12.1

    24.5

    JilinShanghai

    Chongqing Shandong

    JiangsuGuangdong

    ZhejiangHubei

    Liaoning0 2.75 5.5 8.25 11

    2.95.2

    6.47.2

    8.28.79.19.710.5

    Chinas Automobile Production by Region in 2013 (% shares) Region 1

    TOP TEN CAR PRODUCERS IN 2015 (million units)

  • Chapter 2

    Statistics

  • 8

  • Chapter 3

    OEM

  • China OEMs History

    China began to develop a domestic motor vehicle industry in the

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