MarketReportsareavailableonlineat:MARKETRESEARCHCENTREDepartmentofForeignAffairsandInternationalTradeMinistèredesAffairesétrangèresetduCommerceinternationalwww.infoexport.gc.caTheAutomotiveSectorinChinaFebruary2001TheAutomotiveSectorinChinaFebruary2001(Égalementdisponibleenfrançaissousletitre,Lemarchédusecteurdel'automobileenChine)PreparedbytheMarketResearchCentreandtheCanadianTradeCommissionerService©DepartmentofForeignAffairsandInternationalTrade(FaxLinkno.47114)TheAutomotiveSectorinChina(FaxLinkno.47114)3MarketResearchCentreFebruary2001ReportpreparedbytheMarketResearchCentreMarketSupportDivision(TCM)DepartmentofForeignAffairsandInternationalTrade125SussexDrive,OttawaK1A0G2Fax:(613)943-1103E-mail:mrc@dfait-maeci.gc.caTheMarketResearchCentreproducesawiderangeofmarketreportsbyregionandsectorforCanadianexporters.Thesereportsareavailablefrom:—theFaxLinkDomesticservice(613-944-4500);and—DFAIT'sInfoExportInternetsite(http://www.infoexport.gc.ca).TheGovernmentofCanadahaspreparedthisreportbasedonprimaryandsecondarysourcesofinformation.ReadersshouldtakenotethattheGovernmentofCanadadoesnotguaranteetheaccuracyofanyoftheinformationcontainedinthisreport,nordoesitnecessarilyendorsetheorganizationslistedherein.Readersshouldindependentlyverifytheaccuracyandreliabilityoftheinformation.TheAutomotiveSectorinChina(FaxLinkno.47114)4MarketResearchCentreFebruary2001THEAUTOMOTIVESECTORINCHINAEXECUTIVESUMMARYChinaisconsideredtobethelastmajormarketformotorvehiclesintheworld.Withapopulationof1.3billionandanestimatedvehicleparcofonly16millionin1999(includingpassengercarsandcommercialvehicles),thepotentialforfurthergrowthintheautomotiveindustryissignificant.Despitethepotentialsizeoftheautomotivemarket,theChineseautomotiveindustryrequiresamajortransformationinordertostimulateconsumerdemandforvehicles,whileatthesametimecreatingeconomiesofscalewithintheindustryandraisingproductquality.Whiletheindustryhasseenmajorimprovementsduringthe1990sduetoincreasedforeignjoint-ventureoperations,amajorconsolidationoftheautomotiveindustryisrequired.Therearecurrentlymorethan125operationscapableofmanufacturingcompletevehiclesinChina,whichtogetherproducedmorethan100vehiclemodelsforatotalof1.8millionvehiclesin1999.Theleadingvehiclemanufacturersconsistofforeignjoint-ventureoperations,suchasShanghaiGMandFirstAutomotiveWorks(FAW)Volkswagen.Inthepartsmanufacturingsector,thereareover1700registeredautomotivepartsmanufacturersandanadditional3000smallerpartsproducers.Manyvehicleandautomotivepartsmanufacturersoperateatalossorbreak-evenlevelandsurviveonlybystatesubsidies.GovernmentprotectionismhasdeterredmanyforeigncompaniesfromenteringtheChineseautomotivesector.However,withChina’saccessiontotheWorldTradeOrganization(WTO),domesticvehicleandpartsmanufacturerswillbeseverelychallengedbytheincreasinglevelofforeignimports.Tradebarrierswillbereduced,tariffslowered,importpermitsandquotaseliminated,andgreaterfreedomallowedforforeignfirmstooperatemotorvehiclesales,services,financingandleasingcompanies.However,oppositionfromlargeChineseenterpriseswilllikelymakethetransitionprocessslowerthanpromised.Whiletradeliberalizationwillbeagradualprocess,Chinesevehicleandpartsmanufacturerswillneedthetimetoadjusttothegrowinglevelofcompetition.MergerandconsolidationactivityintheautomotiveindustryisexpectedtoincreaseduringtheWTOtransitionper...
