Published on : Jul 13, 2015
The manufacturing industry in China has always posed a tough competition to its foreign counterparts. In the past, reports suggested that almost 80% of the mobile phones, 70% of cell phones, and 60% of shoes produced globally are manufactured in China. The contribution of the manufacturing industry to the development and emergence of the Chinese economy as a global power is indispensable. However owing to the prevailing adverse economic conditions, China communicated an untoward message to the global automakers last week, that very soon its automotive sales will become at par with that registered by Europe.
Only a couple of days ago, China witnessed its equities collapse, wiping out about US$4 trillion in market value. Amidst such economic turmoil, the China Association of Automobile Manufacturers forecasted that the passenger vehicle sales in the country will exhibit a growth by a positive 6 per cent this year. There are although chances of the industry registering a lesser growth if the economy does not stabilize by the year end. The car deliveries in Europe on the other hand, is expected to rise by 5 percent this year, registering a positive development for the first time in the last seven years.
For years sellers from around the world have visited China attracted by the large population, increasing disposable income, and low ownership. These factors often justified the billions of dollars which the foreign businessmen invested on building factories in China. However, the situation or economic prosperity in China is no longer the same, after the recent equities meltdown. These days the investment circuit in China talks about price wars, falling sales, and struggling dealers, intensifying doubts about China leading as the engine for global growth.
It has become a real challenge for the automakers in the country to survive in the situation. However, due to their over-dependence on China, a considerable number of car makers are still banking on China to stage a comeback. Meanwhile, automakers such as General Motors Co., and Ford Motors, have already started expanding their home markets than their presence in China.