The report is a global market research on China Automotive Industry. The report provides a basic overview of the industry including definitions, classifications, applications and industry chain structure. The china automotive market analysis is provided for the international markets including development trends, competitive landscape analysis, and key regions development status. Development policies and plans are discussed as well as manufacturing processes and cost structures are also analyzed.
The report focuses on global major leading industry players providing information such as company profiles, product picture and specification, capacity production, price cost production value gross margins etc. Upstream raw materials and equipment and downstream demand analysis is also carried out.The china automotive market development trends and marketing channels are analyzed. Finally the feasibility of new investment projects are assessed and overall research conclusions offered
The global automotive industry is a key contributor to the global economy, accounting for over $9 trillion in revenue. China’s automotive market is one of the largest in the world, with sales reaching almost 28 million units in 2020. This report studies China’s automotive industry from a macroeconomic perspective and provides an overview of its key trends, drivers and challenges. In addition to providing an analysis of the industry’s regulatory environment and investment opportunities across all major segments (passenger cars; commercial vehicles (CV) & buses; motorcycles), we also examine key issues facing automakers–such as labor costs, rising wages rates or currency appreciation — that could impact future investments by foreign manufacturers looking to enter this lucrative market
China automotive market
The automotive industry in China is one of the largest in the world. China’s economy is growing at an annual rate of about 6%, creating new opportunities for its automotive market. According to statistics from the International Organization of Motor Vehicle Manufacturers (OICA), as of 2017 there were more than 200 million registered passenger cars and trucks in China, which accounts for about 35% of all vehicles on earth!
The growth rate has slowed down due to government policies aimed at reducing pollution from automobiles. However, demand still remains strong due to rising incomes and urbanization across China’s major cities such as Beijing, Shanghai and Guangzhou.
The main types sold are passenger cars; trucks/buses; motorcycles/scooters; buses & coaches; special purpose vehicles such as fire engines etc.. Distribution channels include dealerships (new/used car sales), auto parts suppliers & workshops (repairing/servicing), rental companies etc..
Government policy and regulations
Government policy and regulations are a major factor in the automotive industry. For example, China has introduced policies to cut pollution, reduce carbon emissions and promote more efficient vehicles. These policies have led to an increase in sales of electric vehicles (EVs) as well as hybrids over the past few years. However, there are some challenges facing this sector as well as other segments of China’s economy due to US tariffs being imposed on Chinese goods including EVs and components for EVs; this has led many companies such as Tesla Inc., BYD Co Ltd., NIO Inc., Zhejiang Geely Holding Group Co Ltd., BAIC Group Corp Ltd., Dongfeng Motor Group Co Ltd., GAC Group Corporation Limited etcetera who produce EVs/Hybrids
Automotive industry structure analysis
The automotive industry structure analysis of China is shown in Figure 1.
- Manufacturers: The top three manufacturers are SAIC Motor Corporation Limited, Dongfeng Motor Group Co., Ltd., and BYD Auto Co., Ltd., which accounted for 43% of the total production volume in 2017. Other major players include Changan Automobile Company Limited, GAC Group Co., Ltd., FAW Car Company Limited (FAW-VW), Chang’an Automobile Group Co .Ltd (CAAMC) and Brilliance China Automotive Holdings Ltd.(BCAHL).
- Suppliers: There are about 3 000 companies operating in this sector including key players such as Valeo SA(France), Continental AG(Germany), Johnson Controls Inc.(US) etc.. Both foreign suppliers and domestic ones have been expanding their presence due to rising demand for auto parts over recent years with some acquisitions taking place along with partnerships between local companies or foreign players entering into joint ventures with them so as not only provide better services but also avoid competition from rivals who might otherwise enter same market segment if they don’t join forces now while being able to benefit financially by doing so too since it would cost less money than building everything yourself from scratch which often leads companies having trouble keeping up quality standards set by competitors
China’s auto industry investment and financing landscape
The investment and financing landscape in China is complex and dynamic, with various government policy and regulations impacting the automotive industry structure. This section provides an overview of China’s auto industry investment and financing landscape, including:
- Government policy on automotives
- Automotive industry structure analysis
- Analysis of environmental risks
Porters five force analysis of china automotive industry
Porter’s five forces analysis is a framework for industry analysis and business strategy development. The analysis provides information on the competitiveness of the industry in which a company operates, as well as on its attractiveness.
Porter’s Five Forces are:
- Bargaining Power of Suppliers: The bargaining power of suppliers depends on their ability to supply goods or services to a firm at low cost or without any cost at all. If you are an auto manufacturer and your supplier has high bargaining power then they can raise prices without any fear that you will stop buying from them because they provide essential inputs to your production process (like raw materials). This will lead to higher input costs for your organization which ultimately affects profitability negatively.* Bargaining Power of Buyers: The bargaining power that buyers have over sellers is also known as buyer dominance or market share; this occurs when there are many firms but only one type of product available in the market.* Threats From New Entrants Into The Industry: New entrants into an industry could be competitors who want more market share either through innovation or by offering lower prices than existing firms do; if these companies enter then there will be more competition within an industry leading towards better service levels for consumers – however this could also mean increased costs due to increased competition between firms trying harder than before.* Threats From Substitutes For Existing Products/Services: Substitutes include products/services similar enough so people would rather buy them instead because they offer similar benefits but at lower prices
SWOT analysis of china automotive industry
Strengths
- The automotive industry in China is a leading global market for passenger cars and commercial vehicles, with sales of both segments growing at double-digit rates.
- The country’s car market has been expanding rapidly over the last decade. In 2017, over 24 million new passenger cars were sold in China–an increase of 9 percent from 2016 levels and more than twice as much as the next largest market (the U.S.).
Conclusions and recommendations
The Chinese auto industry is expected to continue growing in the coming years and will remain one of the world’s largest markets. In this report, we have analyzed the automotive industry in China and its key trends through 2023. We have also provided forecasts for new vehicle sales, production volumes and market share by segment.
Chinese passenger car sales are projected to grow at a CAGR of 8.8% during 2018-2023 while commercial vehicles are expected to register a CAGR of 6%.
The passenger car segment will account for over 70% share in total new vehicle sales by 2023 due to rising disposable incomes among consumers coupled with government incentives on electric vehicles (EV) which has led many automakers including Tesla Inc., Volkswagen AG and BMW AG entering into partnerships with local players such as Didi Chuxing Technology Co Ltd., BAIC Motor Corp Ltd., SAIC Motor Corp Ltd., Geely Automobile Holdings Ltd., Great Wall Motors Co Ltd., BYD Co Ltd etc..
The automotive industry in China is expected to grow at a CAGR of around 6% during the period 2018-2023. The market will be driven by factors such as increasing demand for personal vehicles, increasing number of car owners and rising disposable income among Chinese consumers. However, rising labor costs and environmental pollution concerns could negatively impact the industry growth rate over the next five years
