China Moves to be a Production Leader

Image result for china car factory

 

China has announced that it plans to become a global leader in automobile production within the next ten years.  Currently, the country is the worlds largest consumer of vehicles and has the largest market for them, likely due to the its high rates of growths and enormous population.  Despite this, China is still behind several of the current world leaders in terms of actual production of vehicles within its borders.

Currently, China has been implementing a policy to encourage consumers to purchase more electric cars, and this has worked.  China has been the worlds leading purchaser of Neighborhood Electric Vehicles for the last two years in a row, but this is still only a very small share of the total market.  The government is looking to implement new policies that will further the development of electric and self driving vehicles over the next several years and become a leader in innovation for that sector of the market.  There are already several strong Chinese firms working on developing these, and the number and technology should increase within the ten year plan.

The government is always looking into lowering regulations on foreign investment in automobile businesses.  The level of investment in a single business by a foreign body is currently capped at 50%, but there have been talks about lightening up on this policy.  This will be another move towards strategically gaining the resources and clout to become a major manufacturer on an international stage.

Works Cited

 “China Aims to Be Auto Powerhouse.” Shanghai Daily,上海日报. N.p., 25 Apr. 2017. Web. 26 Apr. 2017. <http://www.shanghaidaily.com/business/auto/China-aims-to-be-auto-powerhouse/shdaily.shtml>.

4 comments to China Moves to be a Production Leader

  • What does China mean by being a “world leader”? Aren’t they already producing almost all vehicles sold domestically, such that they are currently the world’s largest producer, and have been since 2009?

    Now … to what extent are sales of “neighborhood electric vehicles” a good thing? Do they help the environment? Or are they simply a way for (often small) producers to turn government subsidies into vacation homes for executives?

  • greenj18

    With China’s focus on electric cars it makes me wonder if they know something we don’t know or if they’re following a pipe dream. Maybe they might even just be trying to dominate the market in order to capitalize if electric ever over takes combustion engines. Either way it’ll be interesting to see if their investment pays off.

  • shelbyc18

    When will the state-owned manufacturers start making cars of higher quality? I know they leaned on foreign partnerships for making better cars, but since this is slowly going away with new government policies, will the state have more of an incentive to innovate?

    • JDPower surveys indicate the major non-JV brands have gotten much better. Yes, there’s a gap, but smaller than that between the Detroit Three and Japanese companies in the mid-1980s.

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