• May 13, 2010
Currently, there are 130 different automakers existing in China, and in an effort to create stronger companies, the Chinese government will be releasing plans to encourage mergers and buyouts between the different manufacturers. These new guidelines, drawn up by the Chinese Ministry of Industry and Information Technology, is said to prohibit automakers from building new plants unless they acquire another existing manufacturer first.

Autocar reports that presently, the majority of China's automakers sell less than 10,000 units annually, with only five manufacturers moving more than one million cars last year. To put that in better perspective, the country's top ten automakers accounted for 87 percent of the country's automobile sales, or 11.89 million cars. With statistics like that, it's no wonder that the government is urging these different car companies to merge.

What's more, this restructuring plan is all part of the Chinese government's long-term goal to have 20 percent of its automakers' sales to be exported, something that the country hopes to achieve by the year 2015. And with larger, stronger companies making up the bulk of the country's auto industry, that might not be too hard to achieve.

[Source: Autocar | Image: Frederic J. Brown/AFP/Getty Images]


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  • 55 Comments
      • 4 Years Ago
      I can see these Chinese car companies becoming what Kia/Hyundai have become today, there is just too many companies competing for a shrinking market...
        • 4 Years Ago
        @ richy

        > I can see these Chinese car companies becoming what Kia/Hyundai have become today

        You need to check your visions.
        • 4 Years Ago
        Exactly how the hell is Government Motors going to earn any money when there is so much competition?
        • 4 Years Ago
        @Tim

        Oh I don't know, maybe by making reliable & exciting cars? I know it's a radical idea, but somebody has to try it. I should get a noble prize for this!
        • 4 Years Ago
        @hypermiler:

        > You need to check your visions.

        And you need to stop giving biased predictions on what will or won't happen to the Chinese auto industry.
      • 4 Years Ago
      So stopping all new plant building unless a company swallows another is 'encouragement'? Sounds a lot like strong-arm tactics.
      • 4 Years Ago
      Survival of the fittest.
      • 4 Years Ago
      we have good refurbished/remanufactured/rebuilt auto parts and used part locating services. Our site offers online access to multiple automotive part stores.
      Pontiac Window Regulator
      • 4 Years Ago
      The Chinese car market (and economy) is growing and ours is shrinking.

      China could have 41 MILLION cars sold in its market by 2015!
        • 4 Years Ago
        Well, if you think about it, many analysts believed China would get to the 10-15 million mark in 2020 by the most optimistic predictions. Well, it seems like they got there a full decade ahead of schedule.

        I doubt they'll get to 40 million by 2015, but 25-30 million doesn't seem to be that far-fetched.
        • 4 Years Ago
        Notice Brian, in typical childish fashion, just attacks the person without reading the post...

        Hypocrites are hypocritical.
        • 4 Years Ago
        Somebody needs to debate rather than using childish, immature "strategies" such as writing "LMFAO".

        Perhaps you should become more literate before you try to debate with me.
        • 4 Years Ago
        Perhaps you should work on your reading comprehension, Danimal.

        Why don't you read the link and put forward a real argument instead of engaging in ad hominem attacks?
      • 4 Years Ago
      The Devil is in the details, as usual, and they aren't giving out details.
      • 4 Years Ago
      Ahh communism. Isn't it great?
        • 4 Years Ago
        you idiots downrating me need to read chalmers johnson.
        • 4 Years Ago
        Wouldn't surprise me if the companies who resisted the "encouragement" will eventually be "forced" to do as the chinese government demands. Call it a hunch.
        • 4 Years Ago
        this is more like a developmental state than communism.
        • 4 Years Ago
        Read the article. The headline states "force" while the article states "encourage". That's a huge difference in meaning and I dare say the word "force" was used purely to attract the reader's attention. Encouraging companies via tax breaks, etc would make far more sense.
      • 4 Years Ago
      In China, they have the say so, but if they look at the American car history, downsizing might not be such a good thing. The end result is one way thinking with no one really worried about tomorrow, because they are the big company that can never fail. Oh wait...

      The great depression killed off our auto industry, but it also killed off domestic competition too. Imagine if Buick, Olds, Cadillac, and many others you never heard about continued to run independently. I don't think we had thousands, but we had hundreds of car manufactures. Instead of the best winning, the great depression killed of the weakest funded, but not necessarily the worst built. The consolidation of old brands with only a few players killed true competition and alternative fuels as well. Electric, propane, kerosene were all played with, but when you only have a few players in the game, the government and big auto have the say so. While big auto was content with only going in one direction, the Japanese quickly upgraded from scooters to cars and one upped the US when gas crunch time came. They did it again when near $5 (it got to over $5 in some places) killed the popularity of the SUV. Who had the most sales from cash for clunkers?
      • 4 Years Ago
      As long as they are profitable, no interference should be made. But then, China is not one to ever care about free markets.
        • 4 Years Ago
        Does not change the fact that China is a relatively closed market. And absolutely at the mercy of their communist leaders' whims.
        • 4 Years Ago
        hypermiler

        The koreans have been allowed to export in exchange for their obedience and what can effectively be considered American colonization of Korea in the form of military bases and "bilateral security pacts". If Korea allowed "free trade", nearly all of it's domestic industries would be dominated by foreign firms.

        Korean cars have been crap for a long time, and they are still at best, average right now. Get it straight, security and trade pacts do not equal superior product, so get off your high horse, because it isn't really or ever has been, that high.
        • 4 Years Ago
        No cars are exported because the Japanese don't want to buy our crappy white trash Cobalts and our Chrysler 300 ghettomobiles.
        • 4 Years Ago
        @hypermiler:

        > It's the same thing in China. US automakers actually export thousands of US-assembled cars to China in addition to building millions in China, yet there are zero Chinese brand cars in the US.

        The number of cars China imports is an insignificant percentage of the cars sold there. The proverbial "drop in the bucket." And you are wrong about your numbers, I've actually seen a few Chinese branded commercial vehicles in the US.
        • 4 Years Ago
        Perhaps you should tell that to Japan and Korean, our trading "partners."

        Virtually no American cars are exported to these countries, yet millions of Japanese and Korean cars flood our market.
      • 4 Years Ago
      GMC - General Motors China ???

      Will they allow/require outside companies (GM, VW, etc.) to purchase these Chinese companies??

      If you want to decrease the amount, just start an EPA regulation.
      • 4 Years Ago
      that seems illogical...
        • 4 Years Ago
        Hey Analyst, try analysing what you read and respond to the correct post. Sheesh.

        @John: It's perfectly logical to try to employ economies of scale. What *doesn't* make sense about this?
        • 4 Years Ago
        Disclosure: I live in China and see the "China Auto Miracle" every day.

        From a blog about auto news specifically regarding China:

        Digging for News on the China Automotive Market

        So where should you go when you want news and insight on the China automotive industry?

        Actually, there are several good news sites focused exclusively on China automobile makers, the China auto parts industry, and the local consumer markets. Not a big surprise when you think about the size and growth rate of the China auto sector.

        We’ve listed several of the more prominent sites here and tried to highlight a few of the ways that they differ from each other.

        • China Car Times
        • Gasgoo Auto News
        • Go China Auto
        • China Automotive Review
        • Automotive News China

        China Car Times has been up since 2006 and is one of the larger English-language sites to focus on the China Auto industry. It provides daily news, covers new model launches, industry trends, and industry events. It also has a neat little section titled Spy Shots, which shows photos of the latest cars spotted on the roads in China. The site also has a decent little section with statistics.

        The Gasgoo news section (http://autonews.gasgoo.com/) is fairly comprehensive as well. Gasgoo is targeted more toward importers and exporters of car parts and its main business is to try and help primarily China suppliers hook up with buyers. However, that doesn’t take away from the fact that it puts up some good industry news, blogs, interviews, and commentary on the China auto industry.

        Go China Auto is a typical content site with China industry news pulled from a variety of sources and statistics from the China government. However, there is also an interesting blog with a nice view of the auto sector from the local China perspective.

        A site that has been around quite a bit longer and originated with print publications is the China Automotive Review. It’s been publishing weekly newsletters since 1995, has a monthly 4-color magazine, and organizes international conferences on the auto industry. The site is less elegant visually but is very content rich and a good source of news, insight and statistics.

        One more site you may want to glance at is Automotive News China. The site looks to built around its weekly newsletter covering domestic China automakers that export as well as the parts industry in China. It includes commentary and opinion as well as covers government regulations.

        If you think we’ve missed one of the big sites (or you think your site should be listed), please add your suggestions to the comments section below.

        If you're looking for export of auto parts from China, see the following list of manufacturers: http://www.tradesparq.com/user_search.php?keywords=auto%20parts&search=all


        Join the world’s largest global trade networking platform at www.tradesparq.com
        —Connect with trade partners and receive real-time product and status updates
        —Trade partners suggested to you based on your buy/sell profile every time you log on
        —Verify buyers, suppliers and service providers through references
        —Search results filtered by shared connections and relevance

        Plus, thousands of suppliers and buyers, tens of thousands of products and a whole lot more.
        http://www.tradesparq.com
        • 4 Years Ago
        @Rich,

        I think it may be a problem with the commenting system. I'm seeing several other comments by different users replying to the wrong OPs.
      • 4 Years Ago
      @Autblogist!

      Though I'm a critic of authoritarian systems, I'm a strong believer in diversity of politics. Pushing for one ideology over all others is putting all eggs in one basket.

      The fact of the matter is that while human have become ridiculously advanced in science and technology, we are clueless about politics. We've only made baby steps in advancing social structures since the ancient times. From an engineer's point of view every political system ever implemented is a piece of crap, but they are all we've got.

      It'd go a long way when discussing politics to show some mutual respect as human beings, since the topic intrinsically stinks and is probably not worth the emotional investment. It's like two kids getting into a fight arguing over who can spit the furthest. Propaganda have taught us to put politics on a pedestal, you don't have to buy into it. Rather than blaming the other guy for all our problems, we need to step back and understand that we are dealing with a mess we know very little about.
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