China’s auto market has experienced substantial growth over the past decade and is poised to become the largest auto market in the world. With government policies reviving consumer confidence and stemming the fall in auto sales following a dramatic slow down in the domestic economy in 2008, China’s auto market is one of the few that continues to grow. However, shifts in demand means new domestic champions will emerge.
In UBS Investment Bank’s latest Q-Series Research Report: China Passenger Vehicles, it examines the Chinese auto industry and provides assistance to investors in understanding the changes the market is experiencing in terms of demand from a top-down and provincial level perspective.
"Growth in the auto market is likely to remain strong, but because demand in China’s less-developed regions is catching up with the country’s more affluent coastal areas, in addition to the government implementing plans on auto consumption, domestic vehicle brand development and industry consolidation, not all automakers will be equally positioned to capture the growth," says Tyran KAM, analyst at UBS Investment Bank.
"We believe these demand changes will persist so in this report we examine the changes, analyse the causes, and predict the next growth area in terms of geography and product. We also look at statistics that identify those companies best positioned to capitalize on the shifts in demand and those companies most likely to succeed in the new auto landscape in the years ahead," KAM added.
"We expect the central and eastern regions and part of the western region to be key areas for growth in the medium term with lower-priced domestic brands and smaller vehicles benefiting in these less developed markets. As growth migrates to these areas, we forecast this will have a significant impact on the performance of individual automakers because of the differing geographical exposures among the industry’s players."
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