Chinese Automotive Industry

Over the last few years it has come into notice that Chinese made goods are slowly taking over the market globally. This trend has also reached the automotive sector where Chinese automotives are the ones that are mostly in demand around the world. With its entry into the World Trade Organization in 2001, Chinese automobile companies have done a great job in upgrading their products to meet the world standards but at the same time they have taken painstaking efforts to increase their production.

As a result, in less than two years after its WTO debut, China has emerged as the fourth largest automobile producer in the world. This exponential growth was further accelerated by the presence of the Chinese automotive bigwigs like Hondaand Suzuki.A discussion on Chinese automotives will be incomplete without the mention of Shanghai Automotive Industry Corporation.

This corporation is a conglomerate of various local companies and has got a whooping 45% share in the Chinese automotive market. Though a fatal threat was experienced by the Western car manufacturers after the debut of the Chinese automobiles in the USA in 2005 due to its low cost cars, a yawning gap was observed in terms of quality.

The duties on the imported vehicles in India, according to the WTO directives, have to be slashed down to 25% by the end of 2006 which translates to a tough competition on the home turf. Furthermore, the Chinese automotive industry is largely dependent on the various foreign partners who have huge stakes in the market. For example, most of the latest automotive technologies and funds come from Japan.

The Chinese foray into Indian automobile sector took place in the year 2002 with two-wheelers. A 100 cc bike, called Cosmo Blaster was launched jointly by Chongging Lifan and Hongda Industry (Group) Co. Ltd. As per the expectations of the customers the bike was quite cheaper and loaded with more features when compared with an Indian one. Though the market response so far has been little better than lukewarm, the sole aspect bothering the Indian consumers is the quality and durability of these bikes. It is now to be seen whether this bike will outclass its Indian counterparts and if Chinese Automotive is going to play a big role in the coming years or not.