Given the recent developments in the auto industry, it appears that the big car makers in the US are looking eastwards in search of markets.
The sales of automobiles during the month of June in the US is close to drop to an annual rate of 12.5 million units. This figure is about 15% less than last year’s stats. Coinciding with these developments, the Big three manufacturers, namely GM, Ford and Chrysler would be exporting goods worth US$ 2.2 billion to China.
Why is China a promising destination?
Not to mention that the Chinese auto industry has it’s own share of troubles, but it is still one of the most happening markets. According to a projection by Mckinsey, at present the country has the highest sales-growth rate for automobiles. Moreover, by 2010 it is expected to attain mammoth proportions and become the second largest market, just behind the USA.
There’s little doubt about the fact that China’s automobile production has been on the rise for years now.
Between the years 2001 to 2005, automobile consumption in the country experienced CAGR of 54.42%. While the consumption showed an increase, the real promise lies in the fact the country still had only 11 automobile units for every 1000, and that’s a much smaller market penetration of vehicles compared to other countries. For instance, in 2007, UK had 373 cars per 1000, US had 478 cars per 1000, Australia 485 had cars per 1000, Japan had 395 cars per 1000 and Italy had 539 per 1000.
On the whole China seems to be a hot spot as far as the automobile industry is concerned. As far as the US is concerned, though there may be some differences between the two countries about investments, but as it is learned the high ranking U.S. and Chinese officials are working to smooth out even those.
For more insights into the automobile industry, kindly follow me through the URL below.
Part 1 – How to use detailing clay