Cars
Autoshow-A long drive to global dominance for China carmakers
(Agencies)
Updated: 2010-04-23 16:25
 |
Large Medium Small |
HONG KONG - Chinese car makers may have the world's largest market to play in but face many hurdles including a shortage of original models, an overcrowded industry and a lack of overseas acquisition targets before they can challenge for global leadership.
None of this has dimmed the ambition of the country's auto entrepreneurs, however. BYD Co Chairman Wang Chuanfu, who has become China's richest man after US billionaire investor Warren Buffett invested in his company, has said he wants to build BYD into the world's biggest car company by 2025.
|
|
To be sure, the swift growth in car sales in China in the past couple of years has been nothing short of breathtaking. Sales rose almost 50 percent last year to 13.7 million vehicles and are up 76 percent in the first three months of 2010.
But translating that strong growth at home and taking on the likes of Toyota Motor Co, General Motors and Ford Motor Co on the global stage is mission that could take China's top automakers decades.
"Topping China's market is relatively easy, but topping the world market by 2025? I would say that's a shot a little too far," said Anil Sharma, an auto sector research analyst at Hybrid-ev.com.
China's cluttered market
One condition that a carmaker must meet before it succeeds globally is a dominant position in its domestic market.
"History has shown that all car manufacturers who were successful in the export market, (did so) after they had a strong position in their home market," said Klaus Paur, director at TNS' North Asia automotive division.
When Toyota overtook General Motors as the world's best selling carmaker, for example, its sales accounted for nearly half of the Japanese market.
By contrast, China's industry remains fragmented, with more than 70 domestic manufacturers and no dominant producer.
"At the top (of the industry), it is still not very crowded, but at the bottom it is. There are too many players," said Sharma, who predicted consolidation would come only after the sector's growth loses steam.
Local winners are starting to emerge, however. State-owned SAIC Motor, BYD and Geely Automobile, whose parent is buying premium brand Volvo from Ford, are all tipped as being among a handful of winners in China in coming years.
Another contender is Great Wall Motor Co, the largest Chinese sport utility vehicle (SUV) maker without a foreign partner.
"We believe Geely, BYD, Great Wall and SAIC are potential winners," said John Bonnell at JD Power information services provider, part of McGraw-Hill Companies.
