The automotive sector is one of the core industries in the Chinese economy. First time in automobile history China has evolved to the second largest automobile market worldwide with 7,2 million vehicles sold in 2006 – compared to 5,8 million in the previous year. The growth rate is expected to level off at around 10% p.a. until 2010 as stated by the China Association of Automotive Manufacturers (CAAM), making China one of the most dynamic and promising automotive markets worldwide. For 2007 8,9 million vehicles are expected to be sold.
Especially sales of small and medium sized passenger cars are booming, due to a growing demand from the so-called second and third tier cities. And there is even more potential for the future as the average car density per thousand inhabitants in China is still a mere twelve units.
In the past few years the international supplier industry has positioned itself well in China as a result of being technology leaders. Similar components and parts produced by Chinese manufacturers are low priced but often show critical quality defects. Future business opportunities arise from increasingly strict environment and safety regulations in China.