Strong Automotive market, 2014 !

The Chinese automobile market is the biggest in the world. Throughout the years it has grown into a giant, evolving to fit the needs of the country and its population.

                In 2013 the Chinese auto market recovered from a slight recession and increased its profits through the assistance of economic stimulus packages aimed at the auto industry and an increased demand for cars in China�s interior. Experts agree that China�s auto market will likely remain stable through 2014, building off of the momentum they gained in the last year. In 2013 China�s sales rates were once again in the double digits as they were for the majority of the last decade before the recession.

                At the Detroit Auto Show this year car manufacturers from around the world were glad to hear of the success of the Chinese market; the European and American markets have been slow growing in recent years due to a variety of ills including economic recession, unemployment rates, and more. The Chinese automobile market is receiving much interest from the world and should also see an increase in investments pouring into the automobile industry from some of the major global car manufacturers.

Car companies including Mercedes-Benz(under the Daimler AG�s Greater China operating branch) predict double-digit growth in the Chinese market again this year. Volkswagenhas high hopes for the country as well, putting its estimate between 5-7% growth over the next 5 years. Automotive consulting firms weighed in and put their numbers between 9-11% potential growth. General Motors and Fordwill likely continue to be popular amongst the Chinese and will profit from the expansion of the market.

                China is doing all it can to promote a strong automotive industry- more stimulus packages will be aimed towards the sector and the rise of personal income in much of China will also hasten the market rise. Sales caps that remain in cities like Shanghai and Beijing to curb air pollution should be able to be made up for by the increase in demand for cars in the more rural areas of China.

                The one automobile market that may not benefit from China�s success is Japan, whose Nissan, Toyota, and Honda brands do not sell well in China due to political tensions between the two nations. Japan�s automobile industry took a hit along with the rest of the world and has recovered from that downturn; they optimistically expect growth in China despite the lack of sales and rising tensions. The Japanese are planning to release a few redesigned and upgraded cars from its automobile manufacturers. Nissan will use its strategic partnership with Dongfeng Motor Corporation (a Chinese company) and look for niche markets within China to market its products. Honda and Toyota have also made efforts to cater to entry-level buyers as well as established automobile owners with new and redesigned cars that may do well in the coming year.

                The Chinese automobile industry is strong; it is increasing in size, demand, sales, and the interest that is being generated throughout the world and the automotive community is unprecedented. The future looks good for the automotive market in China.

Amsia's JV Partner Dongfeng, signs $1.3Billion deal with RENAULT !

Early in December 2013 French automobile manufacturer Renaultcreated an alliance with the Chinese car company Dongfengto found a joint venture company called Dongfeng Renault Automotive Company in China. Their proposal was accepted by the National Development and Reform Commission in China and approved by the proper authorities.

Dongfeng Motor Corp President Xu Ping (Right) and Renault S.A. President and CEO Carlos Ghosn shakes hands after signing the joint venture contract on Dec 16, 2013 in Wuhan city.

                Renault has been a long time player on the automotive manufacturing stage while Dongfeng is newer- this partnership will allow Renault to ease a newer company into the big leagues while also giving Dongfeng the opportunity to create and sell uniquely Chinese cars to its domestic market. Both companies have much to gain from this partnership, predominantly a new market for Renault and more experience in the automotive industry for Dongfeng.

                Renault has a partnership with Nissan (which starting in 1999) which has been profitable for both companies. It is now the third largest automotive group in the world and sales increased from 4.9 million to 8.03 million units between 1999 and 2011. This partnership allowed the French Renault and the Japanese Nissan to expand their markets to now include the United States, Europe, Japan, China, India, and Russia. These companies play off the strengths and weaknesses of both sides- Renault works on diesel engines while Nissan researches new gasoline engines; research and development has improved as has the companies� ability to market and reach a broader customer base. In another positive spin Renault was able to expand its international market while Nissan was able to gain financial stability as a result of the partnership.

                Dongfeng obviously has much to gain from partnering with the more experienced Renault. The Dongfeng Motor company already has a strong alliance with another OEM JV manufactirng company called Amsia. Amsia and Dongfeng partnered in collaboration to produce new technologies to reduce emissions, pollution from automobiles, and other environment-saving methods. Amsia Motors, is well connected to the European and global automobile markets as it also has technical working partnerships with Cummins Westport, Deutz, MAN, Perkins and advancing.

                The importance of automobile alliances such as Renault-Nissan, Renault-Dongfeng, and is immense. Not only do these alliances bring together a global automobile industry and merge markets, but they also bring more automotive options to people around the world, improve technologies in these cars by researching and sharing the information with each other, and build a network of companies that can better serve their customers. This partnership will allow the stakeholders in the companies involved in the alliance to be able to work with the complexities of all the facets of this partnership and the automotive industry including research and development (mentioned above), purchasing, manufacturing, and marketing. The automobile industry can only get better. 

Improved Automotive, technology and standards - China !

AMSIA MOTORS, SELVO S30.

In a study done by J.D. Power�s Chinese division, recent months have shown that the Chinese have improved both the technology behind their cars as well as the engineering. Improvements have been made to raise their domestically produced automobiles to international standards primarily in the internal systems of the cars; the engine, transmission, ventilation and the heating and cooling. The study looked at 213 car models sold by 65 different car brands while surveying around 21,000 new car owners about their experience with those new cars.

This year four Chinese automobile brands scored above the automobile industry average, according to Mei Songlin (VP of J.D. Power�s China branch), have slowly begun to revolutionize the domestic Chinese automobile market.

New car brands in China and its automobiles will enter into the Chinese market this year; despite its relative anonymity one of its brand sedans received five stars from the European New Car Assessment program proving that the Chinese are innovative and improving the quality of their cars with every passing season.

Foreign automobile companies still have the history and experience, however; according to the study only 27% of domestic Chinese sedan sales were to local Chinese automobile manufacturers. Few Chinese cars sell outside of the country of China and no Chinese automobile company is yet authorized to export and sell cars within the United States. The most popular cars sold in China with the highest customer approval rating are the Toyota�s Lexus and Daimler AG�s Mercedes-Benz in terms of quality, followed by cars from Subaru, Volkswagen AG and BMW AG.

The study recommended that the Chinese automobile companies improve not only the car systems (ventilation, heat and air conditioning, engine and transmission) but the fuel efficiency and noise produced by the car. Emissions have become a very big deal in China as of late at the air quality has continued to deteriorate and drastically affect the health of China�s citizens. Fuel efficiency as well plays a role; people all over the world want cars that run longer on less gas as gas prices have also skyrocketed. China�s big cities also produce a lot of noise with the thousands (if not millions) of cars and people constantly on the move.