China’s strong economy to boost passenger vehicle industry
KUCHING: China’s strong economy is expected to boost its passenger vehicle industry.
According to a study by Ken Research, China has a socialist economic system which is world’s largest economy by purchasing power parity.
“It is the manufacturing hub of the world and is the largest exporter of goods,” the research firm said. “The main goods exported by the country is electrical, machinery, including data processing equipment, apparel, textiles, iron and steel, optical and medical equipment, as well as almost every single category of industrial products.”
China is also the second largest importer of goods. The country is also net importer of the service products. Overall, China is one of the fastest growing economies and consumer market.
“China is world’s largest trading nation has signed various pacts with numerous nations. It has free trade agreements with various nations such as Australia, South Korea, Asean, New Zealand, and Pakistan among others.
“China has the world’s largest population and subsequently high population density. It has an average proportion of urbanised population however the rate of urbanisation is growing at a much faster rate than the world average,” the research firm said.
However, Ken Research noted that for the past couple of years the Chinese economy has been experiencing a slowdown, with the country’s debt having increased significantly and its debt to gross domestic product (GDP) ratio having soared over a decade.
“As the Chinese economy expanded over the years, its regulatory environment has not been able to keep up with the pace. The growth of new business has been outperforming the government’s ability to regulate them,” the research firm said.
Ken Research noted that other major problems that the country goes through includes concerns about labour force and the pricing system.
“The nation is marred with large scale unemployment,” it said. “The government has further struggled to contain social strife and environmental damage due to rapid transformation of the economy, high corruption, and low collection of public receipts among others.”
That said, Ken Research highlighted that China’s passenger vehicle market is one of the biggest in the world.
Aside from being a major segment of automotive industry, this market also has the highest number of brands and models.
“It is the global leader in the passenger vehicle production. It has been steadily growing after it overtook the US is terms of sales in 2009,” the research firm said.
“It efficiently caters to the needs of consumers as the Chinese passenger vehicle is known for its strong product portfolios, top class features, and superior brand loyalty: all at affordable prices.”
Furthermore, Ken Research noted that the industry has also recognised the consumers’ need for hybrid and electrical vehicle as well as the environmental concerns.
“The major drivers for this market is the increasing disposable income, rapid urbanization, demand for new cars from lower tier cities, and low vehicle costs,” it added.