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Boom Of China’s Automobile Industry

cri-report.com - The automobile industry has a significant influence on promoting and ensuring the steady development of global economy. In the period of 11th Five-year Planning, the rapid development of automobile industry in China has made it become the important mainstay of the national economy. The development tendency of China's automobile industry and the challenges faced by China's automobile industry are emphasized.

The booming China's automobile industry and board automobile market in China have become the focus in global. The financial crisis which was broken out in the end of 2008 has made great attack on the global finance. Under the background of severe landslide and recession of international automobile industry, China's automobile industry has a rapid development. In 2009, the sales volume of domestic automobiles was 13.64 million, increasing by 46% YOY. The statistics (according to research of CRI) shows in 2010 that from January to May, the sales volume of new automobile was 6.0533 million, increasing by 34.07% YOY. It is predicted that in 2015, the sales volume of automobile in China will reach 34 million and in 2020 it will surmount to 200 million, which means China will actually enter the list of country of automobile.

With the development of automobile industry, it has the following development tendencies. First of all, from the aspect of automobile suppliers, the automobile manufacturers will accelerate mergers and acquisitions. The local brands of automobile will increase constantly, and the environmental-friendly automobiles will develop as soon as possible. By establishing joint companies with international giants, some domestic brands such as the First Automobile Factory of China and Shanghai Automobile Factory have become the leaders in the small-scaled automobile market of China. Besides, the market share in the second and third tier cities will sharply increase and have great potentials. The growth speed in the first-tier cities is slower than other cities. Last but not least, the competition of independent brands is inferior to joint brands.

Meanwhile, the problem which we will face is that the contradiction between the narrow market and numbers of manufacturers, which limits the realization of scale economy. According to the Ninth Five-year Plan in automobile industry, the manufacturer who can achieve the industrial scale is only Shanghai Volkswagen. The phenomenon is not only because of the low-level technology of automobile industry and the long-term tariff protection, but also because of the contradiction between the narrow market and numerous manufacturers.

In the long period future, the automobile industry in China will keep fast growing. The future of China's automobile market is bright but the challenges and tasks it will face is arduous and cumbersome.

To get more details, please go to Report of Chinese Automobile Distribution Industry, 2012