China’s automotive industry continues to be of global importance8. October 2020
According to a new report by Fitch Group analysts, manufacturers and suppliers outside China are looking for alternative locations, but the size and importance of the Chinese market is simply too tempting. The impact of the global Covid 19 outbreak has prompted some automakers to rethink their dependence on China as a manufacturing base. However, the report also mentions that no manufacturer is planning to close its facilities in China. It would be more a question of spreading production and suppliers across several countries rather than putting all their eggs in one basket, in this case China.
Despite the possible withdrawal of some suppliers from China and production relocations to other countries, the Chinese automotive market remains very attractive and still occupies the top position worldwide in terms of sales of new vehicles. The figures from the Fitch report confirm this. China receives top marks for attracting companies and conducting business activities, as well as for its good infrastructure and strong consumer purchasing power. At 88 percent, the share of new cars in the total number of registered vehicles is also significantly higher in China than in other countries.
However, the Fitch report also sees weaknesses in China. For example, the growth indicator for new car sales, based on the next five years, is relatively low at 7.3 out of a possible 100 points. The average for the Asian region is 42 points, indicating growth opportunities for automakers in emerging markets such as Vietnam, Thailand and Indonesia. For the economic risks, especially with regard to the crisis caused by Covid-19, China again scores very well. In a separate report by Fitch, published in May 2020, China scores more than 80 out of a possible 100 points for indicators of short and long-term economic risks. It can therefore be assumed that China will continue to provide a solid framework for car manufacturers and their sales activities in the future. If you need CCC certification in the automotive sector, China Certification is an excellent partner for you. We have been advising leading automotive suppliers and vehicle manufacturers on their CCC certifications for years.
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