According to the comprehensive foreign news report, the growth rate of China's auto market has slowed down in recent years, but major multinational auto companies are still competing to expand production capacity in China. The analysis company estimates that the capacity utilization rate/operating rate of China's automobile factories will be only about 70% in the future, and the self-owned brands will be lower. The auto market has cooled overcapacity. The US media reported that the Chinese government has begun to worry about the economic downturn. However, multinational auto companies are as optimistic as ever, and they are betting on the development of the Chinese market in the future. In November this year, the People's Bank of China cut interest rates to cope with the economic weakness, which has weakened the market demand for cars. However, major auto companies still insist on expanding production routes in China. There are even claims that sales performance is not satisfactory due to insufficient investment. Plate Flange,Flat Faced Flange,Forged Steel Flanges,Stainless Steel Plate Flange SHANXI BAOFAN HEAVY INDUSTRY GROUP CO., LTD , https://www.baofanflanges.com
In November of this year, China's auto sales volume was 2,090,900 units, an increase of 2.30% year-on-year; the cumulative sales in the first 11 months were 21,709,100 units, an increase of 6.14%. In contrast, sales for the full year of 2013 increased by 14%, with sales of 21.98 million units. Since September, China's auto market sales have been down to 3% year-on-year. In October, it has maintained similar levels, and in November it has been lower, reaching a 21-month low.
Foreign media said that it is obvious that the Chinese auto market is turning cold. Along with this, the capacity utilization rate is low under the expansion of the expansion plan. According to IHS Automotive's data, China's auto industry's overall capacity utilization rate in 2010 was 91%, and it is expected to fall to 68% by 2015 and continue to fluctuate around 70% until 2020.
Local independent brands are under greater pressure, and their capacity utilization rate is lower in the face of market share being eaten by whales. IHS estimates that the capacity utilization rate of foreign brands is 85%, while the capacity utilization rate of independent brands is only 65%.
In contrast, the US auto industry's capacity utilization rate in 2010 was 69%. In 2011, it caught up with China's level. It is expected to reach 94.8% in 2015 and will remain above 90% by 2020.
Although many joint venture executives acknowledged that they may encounter capacity problems under the expansion, they still feel that the competitors are under greater pressure. They believe that their investment takes into account the market's development potential and growth space; although the increase in the auto market to single digits may make The auto industry is suffering, but foreign brands regard their own brands as the “bottom†role and believe that they are better able to withstand the market downturn in the short term.
Flocking to expand production, you chase after me. Basically, every major multinational car company is expanding its production capacity in China.
· GM plans to invest US$14 billion in China between 2014 and 2018 to build five new OEMs and two component plants. In 2014, GM's production capacity in China was 3.5 million units, and the operating rate was 97%. The production capacity will be expanded to 5 million units in 2015. It is expected to reach 5.4 million units in 2018, which is 54% higher than the current level. The operating rate will remain at 93%. .
· Volkswagen's latest medium-term strategic plan, with a global investment of 85.6 billion euros from 2015 to 2019 and an additional 22 billion euros in China. Volkswagen earlier announced that it will achieve a production capacity of 4 million vehicles in China in 2018. In fact, according to statistics, it will far exceed this figure, which may reach 5.4 million vehicles or more.
· Ford is preparing to open Changan Ford's third plant in Chongqing before the end of 2014, with a capacity of 350,000 units to build the new Focus and Maverick. In 2015, the Ford Hangzhou plant will be put into operation, with a capacity of 250,000 units, and high-end vehicles such as Sharp, and even rumors that it will produce Lincoln luxury brand vehicles. By that time, Ford's production capacity in China will reach 1.2 to 1.5 million vehicles or more.
Fiat Chrysler is also preparing to build a second plant in Guangzhou after the GAC Fiat Changsha plant, and the Jeep brand will be put into production at these two plants. Philippine plans to double the production and sales volume in China to 850,000 by 2018, much higher than the 130,000 in 2013.
Other car companies such as PSA Peugeot Citroen will achieve a production capacity of 1.5 million vehicles in China. After that, Renault also hopes to achieve an annual production and sales of 800,000 vehicles. Both Toyota and Nissan have announced that their production and sales in China will increase to 2 million in three to four years. .
Although most of the above-mentioned car companies have slowed their sales growth in China in the past few months, Ford has also experienced a rare landslide. However, these car companies attribute the sluggish sales to the production bottleneck, but they are not afraid of overcapacity.
Luxury cars and crossovers are particularly strong in China, and the advantages of foreign brands in these market segments are even more pronounced. These products have higher profit margins and sales in China will increase sharply in the next few years. The pace of expansion of luxury car manufacturers in China is not inferior to that of popular brands.
German luxury cars such as BMW, Mercedes-Benz and Volkswagen Audi have long held the domestic 70% luxury car market, and now they are facing increasing competition and have increased production capacity in China. Audi's production and sales in China will soon exceed 700,000 units/year. Jaguar Land Rover, Volvo and Infiniti have successively set up production capacity in China to enhance cost competitiveness.
Before McKinsey expected China to replace the United States in 2016, becoming the largest luxury car consumer market. IHS expects to have a “Golden Crown†in 2015; in 2020, the annual sales of luxury cars in China will reach 2.4 million, compared with an estimated 2 million in the United States.