Major Chinese Footprint in the Automobile Sector that Can Change the World’s Automobile Market

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Recent reports suggest that being the world’s most populated country, China is the largest automobile market in the world but the nation’s carmakers are struggling to go with the same flow with international manufacturers. Experts inform that the automobile manufacturers of China are lacking technology, experience and the power of the brand name, where the international automakers like Ford, Volkswagen, and Hyundai are beating the Chinese car brands even in their country. In almost every industry, one can find the tagline “Made in China”, and there are only a few sectors including automobile which was lacking that tag but the Chinese manufacturers are currently planning to take giant steps in the international automobile markets too.

Foreign Automakers are Making Huge Profits due to the Enormous Chinese Market

Statistics apparently indicates that the foreign automobile brands are commanding the Chinese market for near-about 70 percent, but the nation’s own automakers are trying hard to improve their return on investment and also the economy of the country by tending to export their cars produced in the country to other developing countries where people are more focused on price than the brand-name. An independent survey suggested that the Chinese consumers preferred foreign brands more than the homegrown ones as they thought the cars produced in the country are lacking something.

Only in a few years, the world has observed the Chinese market to have increased suddenly to an extraordinary level and the reasons are supposed a sudden explosion of wealth in the hands of middle and upper classes, and cars have become a symbol success among the Chinese populace.  An analysis by a renowned survey conduct has clearly indicated that GM has earned 35 percent profits in the global market and in China alone, they have earned around 44 percent of its return on investment.

How good are they?

Innovation and the urge for improvement are always ignited in the minds of the Chinese manufacturers and that has led the country’s auto-brands to buy foreign technology, know-how and build market presence in the home ground. Some of the hot auto-deals Chinese made includes the investment of some $1.1 billion in troubled automated Peugeot-Citroen by the state-owned Dongfeng Motor. Another memorable incident took place when the assets of Fisker Automotive, a bankrupt US hybrid sports cars manufacturer, were won by a Chinese car parts manufacturer called Wanxiang in an auction.

In an attempt to beat foreign competitors in the race and expand globally, the well-known Chinese sports utility vehicle manufacturer Great Wall Motors has recently announced its interest to acquire over the world’s most popular SUV maker Jeep. A Press report has clearly indicated that the bid interest about the acquisition of legendary Jeep by Great Wall has been confirmed by a company spokesperson, though the formal offer has not been made yet.

One who is aware of the international automobile market, it is quite known to them that Sergio Marchionne, CEO at Fiat Chrysler Automobiles, has mentioned that he is looking for a merger or a buyer to improve their company from the world’s seventh-largest car company to race globally against other popular brands like Volkswagen and Toyota. Earlier reports apparently have indicated that Sergio has previously persuaded a deal with General Motors.

While comparing the two automakers, it has been found that during the previous year, Great Wall Motors has sold nearly 1.1. million cars and most of them were sold in their home country only. This Chinese automaker is extremely keen to build out their global brand name and earlier reports suggested that in the year 2011, China’s Geely Holding Group bought Volvo Cars from the American Automaker Ford. With these small-small steps, Chinese automakers are moving towards making an enormous impact on the world’s automobile market. Soon the world is going to see some major transformation if this merge or acquisition takes place.

                                                                                                                        -Rajarshi Chatterjee