Carmakers: What They’re Doing in China Now

Napoleon once said, “Let China sleep, for when she wakes she will shake the world.” We must appreciate Napoleon‘s wise foresight. China’s growth since 1979 is proving Napoleon’s every word. Today China has surpassed Japan as second largest economy and giving US the largest economy of the world run for their money.

Though right now Chinese economy has slow down for a while, in long term perspective China will remain dream of investors across the globe due to their strong and solid economy. Many firms are hoping for an increase in corporate earnings by expanding sales and production within the Chinese economy. China still ruling American’s brain and heart when it comes to investment.

So nobody surprised when Ford Motor Company announced an extensive expansion plan for China. The expansion plan will be worth $5.0-billion.Not only Ford is increasing their production but also they are expanding their dealership throughout Asia. By this expansion Ford will built 1.2 million cars only in China. Many American Companies will see China as last resort for getting good corporate earning. Ford Motor Company is just one of them.

Ford Motors is important but not alone when it comes to expansion in China. General Motors (GM) is following the same path. General Motors enjoying huge chunk of Chinese automobile market. General Motors is one first company who entered in Chinese market. GM is planning huge expansion across the China with new joint venture partners to rip off rich benefits of expanding Chinese economy.

Volkswagen Aktiengesellschaft is also joining this expansion bandwagon. They are major automobile players in Chinese economy with additional production also set to take place over the next few years.

As per Ford Motor’s estimation the Chinese automobile market will grow by 70% till the end of 2020. According to the LMC automotive there will be demand over 35 million units of cars compared to 14 million units in US. So no surprise China has become next destination for car manufacturers.

But the car market for the Chinese economy isn’t only in the low-end, cheaper cars. The high-end market is very active, adding to profit margins and corporate earnings for several firms. Nissan announced that in 2014 they are going to shaken the car market with their new launch “Infinity’. The production of this luxury car will take place locally. Good news for Chinese vendors. Experts are hell bent about how Infinity will give BMW. Audi, Mercedes Benz a helluva of competition.

Chinese economy is showing signs of slowing down but in long term China still is lucrative proportion for car manufactures. Europe is facing heat of recession and there are no signs of improvisation in near future. US economy is in saturation mode. So automatically its make China only one remaining option for Car manufactures. So don’t be surprised if the trend of moving towards China will show consistent pattern. So be prepared for many more new announcements from the land of dragon.