Automotive Industry: Growing Up

Prior to joining the WTO, the industry had generally worried that once China joined the World Trade Organization, the Chinese automobile industry would be seriously affected by imported cars, and the national automobile industry might disappear. However, after the four years after entering the WTO, the domestic automobile industry has not been washed away. Instead, it has gradually become normative and mature in the hone, and the national automobile industry has made considerable progress and development.

Reorganization booms

According to the WTO agreement, after China's accession to the WTO on December 11, 2001, it will gradually reduce the tariffs on imported cars, from 80% to 100% in 2001, until July 1, 2006, and the tariff rate on cars will drop to 25%.

The sudden drop in tariffs has led foreign auto giants such as Toyota, Nissan and Peugeot PSA to take over China. As the Chinese auto market maintained a 13% rapid growth in 2004, the Chinese auto market is favored by global auto giants, especially in the production of cars. At present, the auto oligarchs in the world's "6+3" structure have all been stationed in China.

In the automotive industry, the role of joint ventures is increasingly important. Relevant statistics show that 80% of the growth of China's auto industry this year comes from joint ventures. General Motors, Ford, Daimler-Chrysler, Volkswagen, Toyota, BMW and other foreign auto giants have almost announced plans to expand production in China: Volkswagen has increased capital by 6 billion Euros, General Motors has increased capital by 2 billion Yuan, and Daimler Chrysler has increased its capital by 10 Billion euros, Ford has increased its capital by 1 billion US dollars.

At the same time, in the context of the lucrative auto industry, capital has been poured into the auto industry. In 2003, Midea, Oaks and Greenkell entered the automobile manufacturing field together, setting off the climax of the "wandering Chinese" builder movement.

"Through joint ventures and cooperation with foreign mature automobile companies, local auto manufacturers' technological innovation and R&D capabilities have been enhanced." Li Chunbo, a research fellow at CITIC Securities, said that the current domestic auto companies' production technology is close to the international advanced level, and they have developed independently and can The basis and conditions for sustainable development.

“A series of restructuring activities in the domestic automobile industry over the past few years have made the domestic auto market more rational in terms of its industrial structure and product structure.” Li Chunbo pointed out that the ratio of commercial vehicles and passenger cars in China has approached 1:1, and the auto industry The top five enterprise groups have achieved a production concentration of 70% of the total domestic production.

Capacity "blowout"

“After large foreign investment, the scale of production and sales of domestic automobiles has been rapidly expanded.” Shenyin Wanguo Guoji Wang’s wisdom researcher pointed out that at the beginning of China’s accession to the WTO, only a few joint ventures such as Volkswagen, General Motors, Citroen, and Toyota were involved in the production of domestic cars. Less than one million vehicles; and by the end of 2005, the world's auto giants 63 manufacturers and Hyundai Motor, etc. have all set up joint venture companies in China, domestic production and sales of cars rose to 2.8 million, the scale of production capacity may have exceeded 5 million.

After the rapid expansion of the domestic auto market after the previous period, in 2004 under the influence of the national macro-control policies, the issue of overcapacity was even more prominent.



According to statistics, by the end of 2004, the total inventory of the Chinese car market will exceed 400,000; some experts predict that the domestic car investment has now formed a production capacity that will surpass 20% to 25% in the next two to three years. Overcapacity has made the "price reduction war" in the auto market even more intense in 2004.

"On the one hand, the domestic automobile market has excessively increased production capacity. On the other hand, the domestic automobile market demand has gradually grown from explosive growth at the beginning of China's accession to the world, making the domestic auto market oversupply. In this case, the profits of domestic auto makers The level of the two years before the accession to the WTO is gradually increasing to the average social level. "Li Chunbo analysis pointed out.

“At the beginning of accession to the WTO, due to the release of consumer demand for cars that had been depressing for many years, the profitability of car manufacturers has risen sharply, becoming a large profit maker at that time. When the domestic car production capacity rapidly expands, the market competition becomes increasingly fierce, and the car that has fallen year after year The price has caused the auto makers' profitability to drop from peak to close to the international level.” Wang Zhihui stated that in this process, consumers become more rational and do not pay attention to the shape and size of the car, but pay more attention to the safety of the car. , fuel economy and other intrinsic qualities.

Industrial equipment sustainable development potential

In 2004, the Chinese auto market still maintained a rapid growth of 13%, and it has entered the adjustment period since its entry into the WTO. 2005 was the last year after the accession to the WTO to release the auto market. On January 1, the tariff was lowered to 30% for the fourth time, and the quota for imported vehicles was completely cancelled. “Connecting with international standards” will soon become a reality. The profitable imported car market gradually entered the era of low profit.

In 2005, a series of new policies on the imported car market were implemented one after another this year. There are three guiding and explicit policies directly affecting the imported automobile market: automobile brand sales management methods, cancellation of import vehicle quota system, and land sales and taxation system. Imported car dealers have thus been hit hard, and many imported car dealers have begun to withdraw from this market.

After the twists and turns in 2004, the Chinese auto market gradually became rational and mature. Looking back on the ups and downs of the Chinese automobile industry during the four years after China's accession to the WTO, the Chinese auto industry is currently developing steadily.

“Over the past four years since China's accession to the WTO, the product categories of the domestic auto market have increased rapidly, the prices have dropped significantly, and it has become a reality for cars to enter the family.” Li Chunbo said that joining the WTO has brought diversification to the Chinese auto industry. “The Chinese auto market is a long-term market with potential for sustainable development. The current consumer base in the market has shifted from the previous group purchases and public car purchases to private purchases. The proportion of private car ownership in total ownership has grown from nine. "Five less than 40% increase to the current nearly 60%." Li Chunbo said that it is expected that during the "Eleventh Five-Year Plan" period, the domestic auto market demand and quantity will continue to grow.

“In the past four years since China's entry into the WTO, China's auto brand has been 'Little Holland has been exposed,'” said Wang Zhihui. Currently, Chery, Geely and other manufacturers are among the top ten in the sales of cars. Although domestic auto brands have grown slowly, The overall strength is still relatively young, but its growth and growth are worth the wait.