Chinese government to force car company mergers

Chinese government to force car company mergers

Currently, there are 130 different automakers doing business in China, and in an effort to consolidate the car market, the Chinese government has plans to encourage mergers and buyouts between the different manufacturers. These new guidelines are clever, they prohibit any existing automaker from building a new plant unless they acquire another existing manufacturer first.

Apparently, the majority of China’s automakers sell fewer than 10,000 units annually, with only five manufacturers shifting more than one million cars last year. To put it into numbers, the country’s top ten automakers sold 87 percent of all Chinese cars, or 11.89 million units. These statistics make it obvious why the government is urging these different car companies to merge.

In terms of exports the Chinese government’s long-term goal to have 20 percent of its automakers’ sales to head overseas, this is to be achieved by 2015. If it all goes to plan and larger, stronger car companies are making up the bulk of the country’s auto industry, it’s definitely achievable.

Click here to read a Car and SUV review of the Great Wall X240 (pictured).

Currently, there are 130 different automakers doing business in China, and in an effort to consolidate the car market, the Chinese government has plans to encourage mergers and buyouts between the different manufacturers. These new guidelines are clever, they prohibit any existing automaker from building a new plant unless they acquire another existing manufacturer first.

Apparently, the majority of China’s automakers sell fewer than 10,000 units annually, with only five manufacturers shifting more than one million cars last year. To put it into numbers, the country’s top ten automakers sold 87 percent of all Chinese cars, or 11.89 million units. These statistics make it obvious why the government is urging these different car companies to merge.

In terms of exports the Chinese government’s long-term goal to have 20 percent of its automakers’ sales to head overseas, this is to be achieved by 2015. If it all goes to plan and larger, stronger car companies are making up the bulk of the country’s auto industry, it’s definitely achievable.

Click here to read a Car and SUV review of the Great Wall X240 (pictured).

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