PERSPECTIVES ON THE EVOLUTION OF THE AUTOMOBILE ...

Automotive Industry in China
I Executive Summary and methodology
1. Macro analysis
The automotive industry in China was mainly developed in the past 20 to 30 years.
In 2001 the sales of automobiles in China have experienced an incredible growth
mainly driven by the growth of sales of passenger cars. In 1998 China was producing
less than 2 million vehicles while 10 years later the production has reached 9 million
units.
China is among the three world largest car producers together with the U.S. and Japan.
China is not as affected by the recession as other countries. Therefore, during the first
three months of 2009, more cars have been sold in China than in the U.S. or Japan.
China domestic sales are expected to reach 10.7 million cars in 2009.
However, the automotive industry in China is not mature. The car parking ratio and
the cars sales ratio that are the indicators used to measure the maturity of the industry,
are far lower than those of the U.S., Europe or Japan. Furthermore, the after sales
services and other services like financing, service centers and used car market are still
not developed. The industry potential is incomparable; in the U.S. there are 90 cars
per every 100 people able to drive, however, in China there are only 3.
According to the IMF (International Monetary Fund) the number of automobiles in
the world (that was 600 million in 2005) will be 2,950 millions in 2050. In 2030 there
will be more cars in China than in the U.S. and in 2050 there will be as many cars in
China as there are today in the world.
Exports, although they are still very small, have been increasing. We do not have
reliable data to know the exact ratio of exports on production because the data for
exports are not reliable. However, for sure it is less than 10% (we estimate exports to
be around 4% in 2007). The major regions are Europe and North America that have
70% of the exports. The exports of passenger cars to Spain have been growing,
although the total quantity according the information from customs was around
38,000 units in 2007. However, our research leads us to think that in reality this
number must be much smaller.
China imported around 530,000 passenger cars in 2008 mainly from Japan, Germany,
South Korea and the U.S.
China made cars, in order to be able to be sold in Europe, need to pass the
homologation process. Apart from this Approval by the European Community, that is
mandatory, if they do not get a minimum punctuation in the EuroNCAP the market
will reject them (the EuroNCAP is an organization that provides an independent
assessment of the safety performance of some of the most popular cars sold in
Europe).
Port of Barcelona Chair of Logistics 4