CEIBS 2006 China Automotive Industry Forum

The Chinese Auto Industry: Feasible and Sustainable Development?

The Chinese automotive industry has grown dramatically over the decade. While the demand is still strong, it begins to suffer from the same problems as the global industry: over-capacity and low (or no) profitability throughout the value chain. Chinese car producers are racing to develop smaller and proprietary brand cars to compete for market share; foreign producers are under the pressure of lowering prices to meet the increasing competition from domestic production. The challenge of decreasing profitability applies to the rest of the value chain too. The young and immature component sector is suffering from increasing price pressure, and profit margins are falling while scales of economy cannot be reached yet. Distributors feel equal pressure as margins go down, and as car producers move increasingly into their territory.

On the other hand, environmental and energy pressures are making a stronger and more rapid impact than in many developed markets: the recent rapid growth of car sales and China’s general environment and energy problem, has suddenly brought emissions and consumption to the top of the policy agenda, and aggressive measures are being adopted in order to address these problems.

This conference will look at both the regulatory issues facing the industry as well as the competitive environment of the sector.