The Shanghai Auto Show 2011 has introduced a number of exciting new concepts to the motoring industry and paved the way for a bright future for many leading manufacturers. The show has also highlighted the huge importance of China to the global automotive industry.
Esteemed manufacturers like Lexus, Mercedes and Chevrolet are pushing their new models hard to the Chinese market and other companies are quickly following suit, recognising that China is now the world’s largest auto market, with 13.7 million passenger vehicles sold in 2010.
General Motors has said it plans to double the number of cars it sells in China to five million by 2015, according to The Associated Press, and intends to roll out 60 new and upgraded models in the country.
Image by IvanWalsh via Flickr
However, there are mixed reports emerging regarding China’s future as the figurehead of the global car and car parts industry. The BBC reported that the ongoing slowdown of the Chinese economy, together with the tightening of regulations by the Chinese government and the central bank, is affecting car makers adversely. Some reports say the market could fall by 10 per cent in the next few years, while others speculate it could grow by as much as 25 per cent.
Those putting their faith in the more positive reports include Ford, which has promised to double its Chinese production arm and significantly increase the number of dealerships in the country, and Daimler, which has also given signals that it is about to mount up its Chinese presence.
The focus for manufacturers may be set to fall away from the wealthier cities of China such as Beijing, where car sales are thought to be approaching saturation point. The areas thought to hold more potential for car manufacturers lie inland; in the past, the major auto trade in these areas was in the export of cheap car parts, whereas now, there’s a higher demand for cars at the mid-to-low end of the market.
In an attempt to temper this trend, China’s deputy industry and technology minister, Su Bo, warned that overcapacity could be reached if too much investment is made by manufacturers.
He told a forum: “We haven’t seen overcapacity in China’s auto market in the past few years, but if auto makers keep output growth at the current pace, China’s auto market will see overcapacity sooner or later.”
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