DETROIT ? Burdened by excess capacity and increasingly saturated home markets, Western automotive companies are flocking to invest in China’s car industry. The attraction is obvious: Chinese vehicle sales have grown at an annual rate of more than 22 percent over the past decade, making China easily the fastest growing market in the world.
According to EIU research, sales rose from just 377,000 in 1996 to 2.4 million in 2004 as China?s economic boom led to a dramatic rise in the number of Chinese able to afford car ownership. However, this is just the tip of the iceberg: China?s massive population and strong potential imply an immense growth.
Nevertheless, many foreign automotive companies are finding China a trickier place to do business than they had hoped. After several years of very rapid growth, sales have started to slow, putting pressure on margins, and raising fears of excess capacity.
To download 16-page white paper by Ernst & Young ?CHINA: China?s automotive sector ? at the crossroads?, GlobalAutoIndustry.Com
