An Emerging Market: China's Automobile Industry
WTO it creates a favorable environment for investment and business operation for foreign investors because foreign automobiles and spare parts with low tariffs are allowed to enter the Chinese market. Presently of the world’s top 500 automobile assemblers and manufacturers, 51 have set up joint ventures in China (Asian Information Resources Ltd, 2002).
Also, since vehicle use is just beginning to take off in China, it opens a door of great opportunity for China. In other words, since it is China’s choice of vehicle transportation systems to make, China can then commit themselves to fuels that are much cleaner than oil, such as natural gas. Natural gas after all is plentiful in several Chinese provinces. China can also look to electric motors, efficient hybrid cars and maybe even hydrogen fuel cell vehicles (Wiesbrod, Dr. Roberta, INFORM, Inc., 1998).
Accordingly, China is an emerging market. It has vast resources and a population of more than a billion people. It has launched satellites into space and has a large army. In 2000, China’s output of automobiles added up to 2 million, an increase of 13% from the previous year. 2.1 million automobiles were sold in all, an increase again of almost 14% over 1999. The ratio of sales volume to output was 101%. Presently though China’s penetration rate of automobiles to person is only one auto per thousand people. That is low compared to that in developed countries. So what does all this mean? It means that there is a huge potential in China’s automobile market (Asian Information Resources, Ltd).
References
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