China is capable of producing about 3.9 million automobiles in 2003, a rapid growth from the 3 million in 2002, says a report by ING (International Nederlanden Group) of the Netherlands on the Asian auto market made recently.
The nation's car output, stimulated by people's rising income, price cuts and foreign investment, will increase a further 47 percent in 2004, making China one of the five largest auto producers in the world, according to ING's investigation.
Peter So, a market analyst with ING, cited burgeoning foreign investment as a basic reason for the country's dazzling performance in the auto market. The Republic of Korean (ROK) car makers Hyundai and Kia have planned to pour 430 million US dollars and 300 million US dollars respectively into their joint ventures in China in 2005 and 2006.
Japanese giant Honda's company in
GuangZhou has scheduled to double its capacity to 240,000 in 2004, while Nissan's joint venture has set a yield target of 550,000 in 2006, jointly funded by China's leading auto maker Dongfeng Automobile Co. Ltd.
Meanwhile, auto markets remain gloomy in other Asian countries, said the ING report, predicting a zero increase for the Japanese market and only 2.7 percent in ROK.
China's auto market still has much room for development as the nation's average car ownership ratio is about one to two percent, an extremely low level compared with Western countries. The majority of potential car buyers are aged between 26 to 45, the most populous group in China's population structure.
The government's preferential policies to protect consumer rights and ease the financing barrier for car purchase is expected to further promote the market, said the report.
ING's market analyst Kurt Sanger said that as overseas car makers further localize their products and services in China, the country has the chance to improve the technological level and standard for its auto industry.
China's sustained economic growth, the improvement of the auto consumption environment and more acute competition among manufacturers will provide greater opportunities for the country's auto development, Yao Jie, deputy secretary general of the China Association of Automobile Manufacturers, said during a press conference here recently.
The industry will play an active role in boosting the whole machinery industry, which is expected to grow by about 15 percent this year in overall production value, Yao said.
Analysts also hold that the price of sedans this year will not change much, while imported autos will be sold at even lower prices due to tariff cuts.
ING is one of the world's largest diversified financial service groups, combining insurance, banking and asset management. In 2002,it ranked ninth among world's top 20 financial institutions.
