Wednesday, May 31, 2006
China’s Domestic Auto Industry Going Strong
by from BeijingIn 1949, when Mao Ze Dong and his followers established the People’s Republic of China, one of the major principles of the new regime was self-sufficiency. Not until the late 1970’s and early 80’s did China begin to open its doors to the outside world. In Chinese, China is pronounced, “Zhong Guo” and is literally translated to “middle kingdom.” Throughout history, China has always thought of itself as the center of the world. However, due to slow technological development from 1949 to the early 1980’s, China found itself behind in a world being driven by technological advances.
Since the early 1980’s, China has welcomed foreign investment. This investment, along with an enormous population, and exposure to ideas, know-how and technology, has fueled the Chinese economy and once again is making a bid to fulfill its destiny as the middle kingdom—an economics crossroad. As the economy continues to grow, so do the wallets of the Chinese consumers. One of the major industries gaining from this growing prosperity is the automotive industry.
In 1984, Beijing Jeep became the first auto joint venture between China and an “outside” car company. Since then, car companies all over the globe have spent billions of dollars investing in this, the fastest growing car market in the world. Nowadays, China is starting to rely less on the foreign market and is establishing a name for its own domestic auto makers. Last year, China sold a record 144,173 vehicles overseas, which marks the first time in the youthful existence of the Chinese auto industry that exports exceeded imports. Although most of the current car exports are heading to the Middle East and Russia, there should be more Chinese auto exports heading to the US and Europe in the next three years.
In every major city in China, there are substantial numbers of luxury foreign cars. However, the majority of the new drivers in China are not able to afford these expensive models. With the growth and expansion of Chinese automakers, and their ability to produce a cheaper, domestically made car, China’s automotive industry appears to be heading in the right direction.
