China the biggest recipient of auto investment

Nearly 60 percent of global automobile-plant investments in 2012 went to China, and the trend should continue for the foreseeable future, a Canadian research report said.

China - the world's largest producer and buyer of automobiles - received C$9.62 billion last year from new-capacity investments, or 59.6 percent of the global total.

The figure over the past four years was C$40 billion ($38.9 billion), or 57 percent of the world total, according to the Office of Automotive and Vehicle Research, Odette School of Business, University of Windsor.

The report, which studies major automotive-assembler investment announcements, said China has been the world leader in attracting investments since 2002, and received more than half of all such spending in each of the past three years.

The large amount of investment to China is a result of the nation's growing consumer power, said Ma Chunxia, an industrial analyst with Zheshang Securities.

In the first two months of this year, 3.4 million vehicles were sold in China, an increase of 14.72 percent year-on-year, the China Association of Automobile Manufacturers said.

Although China has made great progress in developing urban public transportation, car ownership continues to rise across the country because it's often regarded as a token of social status.

Zhang Hai, a 33-year-old IT engineer in Shanghai, said having a car would provide more shopping options.

"If I want to buy some clothes in a discount outlet in suburban Qingpu district, I have fewer choices with public transportation. If I have a car, the problem will be solved," she said.

China will be the world's biggest auto market for the foreseeable future as the country strengthens its position, said Tony Faria, author of the report.

"Saleswise, nobody is going to touch (China), period," Faria was quoted as saying by Automotive News, a Detroit-based weekly newspaper that reports on the automotive industry.

"Productionwise, the same is true given the current level of capacity to build in China - plus, new capacity is still piling in."

Almost all of the world's major automotive assemblers made investment announcements in China, according to the report.

Ford made two new-capacity announcements in China in 2012, and the 500,000 additional units of capacity a year will cost $1.36 billion.

Honda is considering a new plant in Wuhan of Hubei province with its joint venture partner, Dongfeng Motor Group. And Nissan made three new capacity announcements in 2012 with a total value of $1.46 billion.

South Korea's Kia Motors announced a new joint venture assembly plant for Jiangsu province with Dongfeng Motor Corp and Jiangsu Yueda Investment Co. The plant is expected to open in 2014 with a capacity of 300,000 vehicles.

Daimler AG made two new announcements of two plants near Beijing.

Jaguar Land Rover, owned by Tata Motors Ltd of India, announced a $1 billion joint venture plant with Chery Automobile Co for a new plant in Changshu of Jiangsu province. The plant will have an assembly capacity of 130,000 units and will assemble both Jaguar and Land Rover vehicles.

However, some analysts expressed concern about the huge influx of investment. China's vehicle inventory alert index reached 57.17 percent in February, an increase of 11.91 percent month-on-month, according to figures from China Automobile Dealers Association.

wang_ying@chinadaily.com.cn