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China To Produce Half of the World's Vehicles

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On: Thu, Jan 27, 2011 at 10:35AM | By: Chris Weiss

China To Produce Half of the World's Vehicles

The "Made in China" tag has never been the essence of fine build. In fact, it's more of a running joke. But if a recent projection by Beijing Auto is to be believed, that tag will be etched upon half of the world's new automobiles in under 10 years. Dazong Wang, president of the Beijing Automotive Industry Corp., predicts that China will be responsible for annual sales of 40 million vehicles by 2020. If that comes to fruition, nearly half of the world's vehicle production will be located in the country.

According to Automotive News, China's vehicle market is already the world's largest, reaching sales of 18.3 million vehicles last year. And Wang's prediction is actually a relatively conservative one. It entails annual sales growth of 11 percent, while China's auto market has actually been growing by 24 percent for the past decade.

Wang outlined his prediction at the Automotive News World Congress in Detroit earlier this month. While Wang expects China to be a leader in auto production, he does not expect it to rival countries like Japan in terms of auto exports. He explained that because China would account for about 50 percent of the global sales, automakers in China will focus on building cars for domestic sale, not export.

China's growing automobile market has been a hot topic of late. During the holidays, several German luxury manufacturers like BMW and Mercedes kept operations running at full force to meet global demand. China was the biggest player behind the increased demand, with year-over-year luxury car sales up by 40 percent in 2010, according to the Detroit News. Ferrari also recently announced that its sales in China had doubled in 2010.

Last week, Porsche indicated that it may be the next premium automaker to focus its efforts on China. Porsche suggested that it will need to expand its manufacturing capabilities and it is considering Asia—likely China—as one of the areas in which it will extend its manufacturing presence.

And it's not only premium brands that are flourishing. Due to a growing middle class in inland cities, consumers are moving away from low-end Chinese vehicles from companies like Geely and Chery toward more expensive, mainstream global brands. China is seen as a vital growth market for many automakers.


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