Research firm IHS Automotive have forecast that the Chinese vehicle market will surpass 30 million vehicles a year by 2020. Sales of vehicles in China this year have
slowed after growing by around a third to exceed 18m units in 2010.
In 2010, around 12 million passenger cars, 5.3 million light commercial vehicles (LCVs), and 1.5 million heavy commercial vehicles (HCVs) were sold in China, according to IHS Automotive data.
The research firm also say current market leaders in China want to expand their presence in the country to maintain market share. As Chinese consumers become savvier and as the rate of growth in the market slows, competition among automakers will intensify, IHS says.
Domestic automakers are increasing their acquisitions of international technological companies and strengthening partnerships with international automotive engineering houses as they look to develop new products to stay in the game, say IHS.
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BYD, SAIC Motor Company, BAIC, Changan, Chery, Geely, FAW, and Great Wall are steadily raising funds via new share offerings, listings, and loans to update their product line-ups as the market hots up; the future for smaller, less experienced automakers looks increasingly uncertain.
Analysts have long suggested that the highly fragmented auto industry in China will see consolidation, with bigger groups able to exploit greater scale economies eventually absorbing smaller.
At the same time as the pressures rise on China’s indigenous players, the established international carmakers with JVs are now ‘pulling out all the stops’ to raise their game in China and win over new customers, build brand loyalty, and increase their share of the world’s largest automotive market, say IHS.
