Chinese auto market at the risk of over-producing cars

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Chinese auto market at the risk of over-producing cars

Posted On : Oct-25-2010 | seen (797) times | Article Word Count : 361 |

In the year 2009, China became the largest car market of the world.

In the year 2009, China became the largest Cars MArket of the world. In this year, the sales of the Chinese car market crossed the sales figures of United States. In this year, the market witnessed a forty six percent increase in demand. While in comparison of the present year, this demand has been seen with just twenty five to thirty percent increase. On the other hand, these sales yet stay unutilized from the Chinese rural region, though the potential of the same is big. Thus, almost each auto maker in the country has ramped up its production for meeting the constantly increasing demand. Also, the foreign automakers lack the capability of manufacturing vehicles which they require to sell in the auto market of China.

Volkswagen, the German automaker has announced that it will soon start its another production facility in China. This will be the 13th production facility of the company and it is likely to be started by the year 2013. Likewise, the Peugeot Citroen intends to ramp up its production capacity up to 750,000 units from the present scenario of 450,000 units along with the Dongfeng, another renowned Chinese auto maker. As far as Peugeot is concerned, it also intends to set up its second JV (joint venture) plant with Chinese automaker Chang'an. The location for the same would be Shenzhen. Besides these auto makers, there are others like Toyota, Nissan, Hyundai, BMW and FAW – the Chinese auto maker that wants to benefit from the expanding Chinese auto market.

Though it is a clear fact now that there is a strong demand in the Chinese market but still there is a little risk of over-production. The regional government of China said that this demand is just half of the capability which is being expected to be in process in the country by the year 2015. For the economic planning strategy of China, the NDRC (National Development and Reform Commission) takes care. The NDRC has already expressed its concerns that if the auto manufacturers carry on raising their production at the present speed then over production is sure to occur in the coming few years.

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<h1>Chinese auto market at the risk of over-producing cars		</h1> Author: <a href='http://www.articleseen.com/profile_cardekho.aspx'>cardekho</a> In the year 2009, China became the largest Cars MArket of the world. In this year, the sales of the Chinese car market crossed the sales figures of United States. In this year, the market witnessed a forty six percent increase in demand. While in comparison of the present year, this demand has been seen with just twenty five to thirty percent increase. On the other hand, these sales yet stay unutilized from the Chinese rural region, though the potential of the same is big. Thus, almost each auto maker in the country has ramped up its production for meeting the constantly increasing demand. Also, the foreign automakers lack the capability of manufacturing vehicles which they require to sell in the auto market of China.

Volkswagen, the German automaker has announced that it will soon start its another production facility in China. This will be the 13th production facility of the company and it is likely to be started by the year 2013. Likewise, the Peugeot Citroen intends to ramp up its production capacity up to 750,000 units from the present scenario of 450,000 units along with the Dongfeng, another renowned Chinese auto maker. As far as Peugeot is concerned, it also intends to set up its second JV (joint venture) plant with Chinese automaker Chang'an. The location for the same would be Shenzhen. Besides these auto makers, there are others like Toyota, Nissan, Hyundai, BMW and FAW – the Chinese auto maker that wants to benefit from the expanding Chinese auto market.

Though it is a clear fact now that there is a strong demand in the Chinese market but still there is a little risk of over-production. The regional government of China said that this demand is just half of the capability which is being expected to be in process in the country by the year 2015. For the economic planning strategy of China, the NDRC (National Development and Reform Commission) takes care. The NDRC has already expressed its concerns that if the auto manufacturers carry on raising their production at the present speed then over production is sure to occur in the coming few years.About the Author: To know more about the <a rel="nofollow" href="http://www.cardekho.com/cars/Volkswagen" title="Volkswagen Cars">Volkswagen Cars</a> and <a rel="nofollow" href="http://www.cardekho.com/cars/Toyota" title="Toyota Cars">Toyota Cars </a> at cardekho.com Article Source: <a href='http://www.articleseen.com/Article_Chinese-auto-market-at-the-risk-of-over-producing-cars_39278.aspx'> http://www.articleseen.com/Article_Chinese auto market at the risk of over-producing cars		_39278.aspx</a>

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