China's auto industry case

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  • Publié le : 29 mars 2011
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The Chinese car industry is rapidly growing. For proof, China became the year the last biggest automobile market of the planet. It should register in 2010 an increase of more than 10 % of theautomobile sales which would exceed the 15 million vehicles. This success explains by several key factors which I will develop in this analysis by bending at first over the demand and then the offer. TheChinese automobile market became number one in the world for several reasons. First of all, the current population in China is 1,3 billion inhabitants what makes the first world population in front ofIndia (1,1 billion) and very far in front of the United States (3oo millions) or Japan (127 millions). Even if the level of average income of the Chinese household is less important than that of theEuropean, American or Japanese, the middle class is in strong progress. The purchasing power of the Chinese which is in increase is correlated in the growth of the Chinese automobile market. So, more andmore persons are capable of buying cars. Furthermore, we noticed the Chinese big cities did not represent all of the potential market. Indeed, the Chinese countryside represents also a strongdevelopment potential of the automobile market. Recently, a legal factor came to benefit the development of the Chinese car industry. Indeed, it was doped by fiscal measures of encouragement in theconsumption in this sector. These fiscal measures encouraging the sales of small capacity, "clean" cars and vehicles in countryside benefited to all the manufacturers including the foreign manufacturers introuble in their own country. The car industry had sustained a transformation to reply to the demand. Today, there are in China more than 80 manufacturers and among them, only some industrialistsdistance themselves while the major part of the Chinese manufacturers confines itself to a production very often lower than 2000 units a year. Their production feeds an internal market very regionalized...
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