World Biggest Auto Market?
Posted by: Dexter Roberts on December 12, 2006
Now just one day after the fifth anniversary of China’s entry into the World Trade Organization, People’s Daily Online (the paper version is the official mouthpiece of the government) is reminding us once more that China may have opened its economy to foreign investment, but for many an official in Beijing, the number one goal still is to build strong local industries—and that is certainly true for the auto sector.
Under the seemingly innocuous, but perhaps overly bold headline “China to be the world’s biggest auto market in 2009,” People’s Daily Online quickly gets to the point: “Five years after entering the WTO, sales of locally made vehicles have almost doubled, and sales of sedans have more than quadrupled. The national car enterprises quickly became large and strong, the market share of own-brand cars” [here they are referring to the likes of Geely, Chery, FAW and SAIC, which have all launched their own brands, to mention the most notable of the local players], have reached 26.4% this year, up from less than five percent in 2001, the article goes on to proudly point out.
“Following the unveiling of self-designed medium and high-end cars by First Automobile Works and Shanghai Automotive Industry Corporation, more and more carmakers have made breakthroughs this year in terms of engine and transmission systems. During the first three quarters, the market share of locally designed sedans rose from less than 5 percent in 2001 to 26.4 percent, leading other countries in growth rate. “
I guess there is no harm in pointing out the successes of the local brands (although that’s not what the headline advertised), but I don’t think the likes of GM, VW, Honda and Toyota who together have pumped billions of dollars into China manufacturing and sales would find this emphasis reassuring. It smacks too much as if Beijing, five years after entering the WTO, is most concerned with nurturing its own national champions, necessarily to the detriment of the foreign players. Trouble is, there are plenty of signs that they are indeed doing so. Today’s People’s Daily article is one more reminder of that.
