According to a new report as stated by financial times, it is very likely that China will build more passenger cars and light commercial vehicles than the whole of Europe for the first time ever this year. This marks a major milestone for the country’s auto industry.
Based on projections by analysts (IHS, LMC Auto and PwC consultancies together with investment banks UBS and Credit Suisse), automobile factories in China will produce a total of 19.6 million cars this year as opposed to just 18.3 million units in Europe. These statistics are partly due to the economic problems facing that region (Europe) as these data include production figures from nations such as Russia and Turkey that are not part of the European Union facing the crises head-on.
European produced cars have steadily been losing a firm grip on the top position as it were years back with only a fifth of the world’s new cars expected to be produced in Europe in 2013. While approximately 23.8 percent of new cars to be sold this year will be built in China, demonstrating steady growth of the Chinese auto-industry which is said to be producing cars ten times higher than it was in 2000.
What this new twist portends for the automobile industry, especially here in Africa is higher influx of Chinese made cars which isn’t new in this region. Globally, this will generate a stiffer competition which will further make auto-leaders demand for more cuts in production cost of cars to survive and maintain favourable profit margins. To achieve this, one way around this is the creation of more partnerships for more cars to be produced in China which might lead to higher exports by China, accompanied by increased production figures.