BMI's Executive Summary

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Production and new vehicle sales in China continue to grow, although a slowdown in growth during the previous year to October 2007 has been evident. BMI's recently published China Automotives Report highlights the fall in output and sales growth from 30% in the first quarter of 2007 to around 24% by October. Despite the slightly lower level of growth, BMI has raised its full-year estimate to show sales of 8.664mn units, reflecting an upturn of 20% by year-end. The original production forecast of 8.285mn units remains, as Kia decided to postpone the opening of its Chinese plant until this year. Going forward for the remainder of the forecast period, now extended to 2012, we would expect growth to continue, buoyed particularly by the government's support for economical cars in the form of tax breaks.

BMI also expects the commercial vehicle segment to contribute significantly to industry growth over the next five years, based on a number of new projects. Daimler has laid the foundations for its new commercial vehicle joint venture with China's Fujian Motors Group and Taiwan's China Motors Corp (CMC), which will produce the Mercedes Viano and Vito multi-purpose vehicles (MPVs) and Sprinter vans. Other recent activity includes a Memorandum of Understanding (MoU) between PSA Peugeot Citroen and China's Harbin Hafei Automobile Industry Group Co to examine the production of light commercial vehicles, while Italy's Iveco, the commercial vehicle division of Fiat, aims to be producing 140,000 units per year in the country by 2010, while also using China as an export base, particularly for shipments to the Middle East and North Africa.

The recent spate of investment activity underlines China's joint fourth place in BMI's Business Environment Ranking for the automotive industry in the Asia Pacific region. This is largely due to a considerable rise in output growth potential as our regional forecast is extended to 2012, while the country's level of vehicle ownership remains low, offering further sales growth potential. On the downside, intellectual property rights issues continue to pose a problem, with a number of manufacturers launching legal action against Chinese carmakers in 2007 for alleged copying of models.

Co-operation continues in the market, however, with Germany's joint venture with Shanghai Automotive Industry Corp (SAIC), Shanghai-VW, taking the lead in sales for H107. Indeed, the German company's performance from both joint ventures has resulted in an improved outlook for fullyear sales, which would ensure that it reclaims the lead from US rival General Motors (GM) and its joint venture with SAIC by year-end. China's Chery has forged a path for the domestic players, meanwhile, taking third place.

Contents

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Chapter 1 – SWOT Analysis

China Autos Industry SWOT

China Economic SWOT

China Business Environment SWOT

Chapter 2 – Regional Market Overview

Table: Asia Pacific Autos Production – Historical Data & Forecasts (CBUs unless otherwise stated)

Table: Asia Pacific Autos Sales – Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 3 – Business Environment Ranking

Table: Asia/Pacific Business Environment Ranking

Economics – Long-term Risk

Politics – Long-term Risk

CBU Output Growth

Vehicle Ownership/Penetration Potential

Regulation

Competitive Environment

Chapter 4 – Industry Forecast Scenario

Production and Sales

Table: China Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Trade

Table: China Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Economic Contribution

Table: China Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 5 – Macroeconomic Forecast Scenario

Table: Macroeconomic Data & Forecasts

Country Snapshot: China Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 6 – Special Focus: Commercial Vehicles

Country Landscape

Table: China Commercial Vehicle Market (2000-2005)

Table: China Detailed Commercial Vehicle Market

Table: China Commercial Vehicle Market Production (2000-2005)

Key Players

Table: China Truck Market 2005

Table: China Bus Market 2005

Key Investment

Table: China Commercial Vehicle Investment

Forecast

Table: China Commercial Vehicle Sales And Production Forecast (2006-2010)

Chapter 7 – Competitive Landscape

Market Overview

Table: China Vehicle Production January 2006

Passenger Car Segment

Table: China Top Four Carmakers Jan-Aug 2006

Manufacturer Developments

Financing

Expansions

Chapter 8 – Company Monitor

General Motors Asia Pacific Regional Overview

Table: GM Asia Vehicle Production 2005 (CBUs)

Table: GM Asia Vehicle Sales 2005 (CBUs)

Profiles

BMI Forecast Modelling

Automobile Industry

Sources

Appendix: Regional Demographic Data

Table- Manufacturing Wages (ave. per annum), US$

Table - Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Asia Automotives: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Automotive Sources

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BMI's Asian Automotives Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include: