Will China Be the Next Great Auto Producer?
It probably isn’t a surprise to anyone, but there are a lot of cars and trucks in the world. According to Investopedia, 95 million vehicles were manufactured globally in 2018, which is more than any other year. That number includes 70 million cars and also 25 million commercial vehicles. It may be a surprise though that China is already the world’s biggest auto producer.
China is the biggest auto-producing country
While the United States used to be the top producer, China continues to hold the number one spot, a role it’s held since 2009. In 2018, China produced 25 million vehicles, which is about 28% of the world’s total production.
Of that total, 3.4 million were commercial vehicles, while 21.6 million were passenger cars. Interestingly, the second quarter of 2018 was when China had the highest production total. Quarterly output dropped in the second half of 2018, which Investopedia suggests could be a result of the United States’ increases in tariffs.
SAIC Motor Corporation Ltd. is China’s biggest vehicle manufacturer, and Shanghai Volkswagen Automotive Co. is the country’s largest passenger car manufacturer. The Chinese government has suggested that China will be manufacturing 30 million vehicles during 2020 and 35 million a year by 2025.
Cars not sold in the United States
Many of the vehicles manufactured in China were then sold within the country. The China Association of Automobile Manufacturers has said that more than 27 million vehicles were sold during 2018. Production in China has grown in recent years to meet domestic demand. Sales have increased from about seven million in 2008 up to 21 million vehicles by 2015.
Many of the bestselling cars sold in China are produced in partnerships between Chinese brands and foreign manufacturers. These partnerships are required by law and have resulted in matches between General Motors and SAIC and also between Hyundai and Beijing Automotive Group.
Cars that are exported from China are often sold in Iran, Algeria, Russia, and Egypt but not generally in the United States. Buyers in the U.S. should soon be able to purchase Chinese cars though.
Last fall, Zotye USA, a subsidiary of the American company HAAH Automotive Holdings, announced that it has agreements for 100 dealer markets and expects to have 250 before its cars go on sale in the U.S. in 2021. The cars will be manufactured in China by the Chinese company Zotye Automobile International Co.
Where the U.S. stands
The United States is still the second-largest auto producer, although in 2018 the country produced fewer than half the vehicles that China does. The U.S. produced 12 million vehicles that year, which is 13% of the world’s total.
While it is the second largest total manufacturer, the United States produces nearly twice as many commercial vehicles as other countries but fewer cars than Japan and Germany (the third and fourth total manufacturers). With fewer young people getting driver’s licenses these days, it seems unlikely that the U.S. will be increasing its passenger car production.
General Motors Company is the biggest auto manufacturer in the U.S., producing 17.5% of the vehicles made in this country. However, GM also sells more cars in Asia than it does in the United States. Ford Motor Company and Toyota Motor Corp. tie for second, each producing 14.5% of the U.S. market.
While China already tops the list as the country that manufactures the most total vehicles and the most passenger cars, the companies behind these vehicles aren’t always entirely Chinese. The United States remains the largest producer of commercial vehicles and is the home of General Motors, one of the biggest auto manufacturers in both countries (at least in partnership in China).