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Automotive industry in China

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Title: Automotive industry in China  
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Subject: Transport in China, Automotive industry in China, Automotive industry by country, Lists of automobile-related articles, Economy of China
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Automotive industry in China

The automotive industry in China has been the largest in the world measured by automobile unit production since 2008.[1][2][3] Since 2009 annual production of automobiles in China exceeds that of the European Union or that of the United States and Japan combined.

Of the automobiles produced, 44.3% were local brands (including BYD, Dongfeng Motor, FAW Group, SAIC Motor, Lifan, Chang'an (Chana), Geely, Chery, Hafei, Jianghuai (JAC), Great Wall and Roewe), and the rest were produced by joint ventures with foreign car makers such as Volkswagen, General Motors, Hyundai, Nissan, Honda, Toyota, Mitsubishi etc. While most of the cars manufactured in China are sold within China, exports reached 814,300 units in 2011.[4] China's home market provides its automakers a solid base and Chinese economic planners hope to build globally competitive auto companies.[5][6]

China's automobile industry had Soviet origins mainly (plants and licensed auto design were founded in 1950s with the help of USSR) and had small volume for the first 30 years of the republic, not exceeding 100-200 thousands per year. It has developed rapidly since the early 1990s. China's annual automobile production capacity first exceeded one million in 1992. By 2000, China was producing over two million vehicles. After China's entry into the

  • China Association of Automobile Manufacturers
  • Statistical Information Network of China Association of Automobile Manufacturers
  • China Society of Automotive Engineering
  • China Automotive Technology and Research Center
  • Shanghai Automotive Industry Association
  • China Council for the Promotion of International Trade Branch of the automotive industry
  • China National Automotive Industry International
  • #8 Nissan's "China Business" May, 2009
  • ChinaAutoWeb: A Guide to China's Auto Industry
  • China: New Car Industry Policy - Deacons - Published October 1, 2004 - Hong Kong
  • , book talk at the USC U.S.-China Institute, 2012.Designated Drivers: How China Plans to Dominate the Global Auto IndustryAnderson, Greg,

External links

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  3. ^ "More cars are now sold in China than in America". The Economist. 2009-10-23. 
  4. ^ a b "China car exports up almost 50 percent in 2011". 2012-01-20. Retrieved 2014-01-05. 
  5. ^ "US-China Institute :: news & features :: video: greg anderson on state capitalism in china’s auto industry". 2012-02-22. Retrieved 2014-02-25. 
  6. ^ "DESIGNATED DRIVERS - How China Plans to Dominate the Global Auto Industry". Retrieved 2014-02-25. 
  7. ^ "China's 10 millionth vehicle this year comes off the production line - People's Daily Online". 2009-10-21. Archived from the original on 17 November 2009. Retrieved 2009-12-05. 
  8. ^ "Chinese Auto Sales Set New World Record of 18 Million Units in 2010". 
  9. ^ "How Many Cars are There in China?". 
  10. ^ "China's E6 electric car: 'We're not trying to save the world – we're trying to make money' - 03 Apr 2009". Archived from the original on 4 December 2009. Retrieved 2009-12-05. 
  11. ^ Heavy Equipment Manufacturing (2011-09-27). "China’s First Home-made Automobile: Jiefang Truck | China's Great Science and Technology". Retrieved 2014-01-05. 
  12. ^ Mann, Jim (1997) [1989], Beijing Jeep: A Case Study of Western Business in China, Boulder, CO: Westview Press, pp. 139–140,  
  13. ^ Mazzocchi, Gianni (September 1984). "Anche i Cinesi vogliono l'auto" [The Chinese as well want cars]. Quattroruote (in Italian) (Milan, Italy: Editoriale Domus) 29 (347): 57. 
  14. ^ Dale, David (1984-04-17). "Great Moments in Media". The Sydney Morning Herald (Sydney, Australia). Retrieved 2012-02-06. 
  15. ^ Mann, p. 145
  16. ^ Mann, p. 149
  17. ^ a b Harwit, Eric (2001). "The Impact of WTO Membership on the Automobile Industry in China". The China Quarterly: 655–670. Retrieved 2010-09-16. 
  18. ^ a b Mann, pp. 151-152
  19. ^ Chang, Crystal (2009). "Developmental Strategies in a Global Economy: The Unexpected Emergence of China’s Independent Auto Industry". p. 7. Retrieved 01/04/2012. 
  20. ^ "Obama's Briefing; Sandalow To DOE; Automaker News; Nat'l Wildlife Federation Embraces PHEVs". 2009-03-27. Archived from the original on 4 June 2009. Retrieved 2009-04-28. 
  21. ^ "A List of High-speed Electric Cars from Chinese Automakers". May 2010. 
  22. ^ "China's fuel subsidy costs the world". Reuters. 2008-06-04. Retrieved 2014-02-25. 
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  24. ^ "Business | China to raise the price of fuel". BBC News. 2008-06-19. Retrieved 2014-02-25. 
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  26. ^ "Beijing protests US post on Tibet". Retrieved 2014-02-25. 
  27. ^ Keith Bradsher (July 5, 2012). "Chinese Cars Make Valuable Gains in Emerging Markets". The New York Times. Retrieved July 7, 2012. 
  28. ^ Brierley, David (2007-09-09). "Road rage in the West as copycat cars from China start to make their marque overseas". The Independent (London, UK). Archived from the original on 2010-04-22. 
  29. ^ CCT (7 December 2009). "BYD SUV Revealed! – Its not a Lexus RV, its not a Lexus RV…". China Car Times. Retrieved 9 April 2011. 
  30. ^ "Sitemap". Autoblog. Retrieved 2014-02-25. 
  31. ^ "China's F1 entry... sorta". Autoblog. Retrieved 2014-02-25. 
  32. ^ "Beijing '08 Preview: BYD e6 electrifies family hauling". Autoblog. 2008-04-17. Retrieved 2014-02-25. 
  33. ^ "BYD Auto | BYD S8 Convertible – Ready for the warm days! | China Car Times - China Auto News". China Car Times. Retrieved 2014-02-25. 
  34. ^ "BYD B8 Convertible: Impending Doom Never Looked So Good, SL-like". Retrieved 2014-02-25. 
  35. ^ "Chinese Byd for entry into sports car market". Autoblog. 2006-11-05. Retrieved 2014-02-25. 
  36. ^ "BYD Auto | BYD T6 – is it Photoshop Tuesday? | China Car Times - China Auto News". China Car Times. Retrieved 2014-02-25. 
  37. ^ Raja, Siddarth (2006-10-31). "Another Chinese copy, the BYD F8". Retrieved 2014-02-25. 
  38. ^ a b c d Ben Berkowitz, Kevin Krolicki and Lee Chyen Yee (2011-03-09). "Special Report: Warren Buffett's China car deal could backfire". Reuters. Retrieved 2011-03-11. 
  39. ^ "BYD's bid to break the Chinese mould". Easier Cars. 2008-03-05. Retrieved 2011-03-11. 
  40. ^ "US-China Today: Chinese Investment in the US: BYD Auto Company". 2014-01-27. Retrieved 2014-02-25. 
  41. ^ a b c "Lawsuits". China Motor Vehicle Documentation Centre. Retrieved 2011-03-12. 
  42. ^ a b "China to Foreign Automakers: Drop Dead". Frank Williams. 2007-08-16. Retrieved 2007-12-17. 
  43. ^ a b "GM Daewoo claimed their investigation results showed the Chery QQ shared a remarkably identical body structure, exterior design, interior design and key components". BBC News. 2005-05-09. Archived from the original on 7 September 2010. Retrieved 2010-10-05. 
  44. ^ a b c "Chery even used a camouflaged Matiz car to pass auto tests to acquire authorization from the government over production and sales of QQ.". 2005-05-09. Archived from the original on 7 September 2010. Retrieved 2010-10-05. 
  45. ^ "". Retrieved 2014-02-25. 
  46. ^ Luca Ciferri (2008-07-18). "Automotive News". Retrieved 2014-02-25. 
  47. ^ Frank Filipponio (2007-08-21). "Shuanghuan Noble — Autoblog". Retrieved 2009-12-05. 
  48. ^ Blanco, Sebastian (2007-12-11). "Good idea? Smart-clone importers violate court injunction at Bologna Auto Show — Autoblog Green". Archived from the original on 28 December 2009. Retrieved 2009-12-05. 
  49. ^ "Greek court rules against Daimler on China SUV - China automotive news". 2009-05-26. Archived from the original on 17 December 2009. Retrieved 2009-12-05. 
  50. ^ Alexander, Jacob Mathew (2010-09-22). "China wants foreign companies to disclose EV secrets".  


See also

Due to this threat by the Chinese government, Toyota postponed the launch of the current-generation Prius until they learn more about the plan.[50]

The Wall Street Journal reported that the government of China will be forcing foreign carmakers to disclose their electric vehicle technology secrets before the vehicles are allowed to be sold in China. The current Chinese automotive policy states that a foreign carmaker must form a joint-venture with a Chinese carmaker if the former plans to sell its electric vehicles there, with the Chinese carmaker owning 51% of the joint venture.

Threats to disclose industry secrets

The ruling states that the latter party’s doings “cannot possibly misguide the public” as the German company claimed in its legal request. The judge noted the salient fact that “the plaintiff is no longer selling the specific generation of the Smart which claims to have been copied, but a different vehicle, with much different characteristics.”

In May 2009 a Greek judge ruled against Daimler and cleared the car allowing sales to begin in Greece. The judge answering to Daimler's demand to ban the Chinese vehicle from entering the Greek market said that “The impression the Noble makes on a third and informed party by its visual appearance is different to the one that is made to the same person by the Smart. . . It is commonly accepted that the decision over buying a new car cannot be based only on the exterior characteristics but many other technical specifications such as the power of the engine, fuel consumption, trim specification, retail price and dealers’ network.”[49]

The Shuanghuan Noble has caused numerous controversies, with Mercedes-Benz even filing a lawsuit against Shuanghuan because of its similarities with the Smart Fortwo.[47] Mercedes-Benz also persuaded the Italian court to prohibit the car from being exhibited at the Bologna Motor Show, but the Shuanghuan Noble car was put on display anyway.[48]

The Shuanghuan Noble (left) and Smart ForTwo (right).


Other Great Wall models may resemble those of other automakers: The Great Wall Florid, may look similar to a Toyota ist; and some older Great Wall Hover models may look like Isuzu Axioms, etc.

A copyright infringement case in China did not see a similar outcome.

A 2008 Italian Turin court ruling substantiated the claim stating that the Great Wall Peri, “doesn’t look like a different car but is a Fiat Panda with a different front end.”[46]

Fiat has claimed that a Great Wall A-segment car, the Peri (Jing Ling in China), is a copy of its 2nd-generation Fiat Panda.[45]

The Great Wall Peri (left) and Fiat Panda (right).

Great Wall Motor

Around that time Chinese state officials, including a vice-minister of commerce and a vice-director of the State Intellectual Property Office, publicly supported Chery.[44] It was suggested that GM may have not patented its technology.[44] In late 2005 the lawsuit was settled.[41]

After mediation attempts failed, GM Daewoo brought a case against Chery in a Shanghai court, but by 2005 jurisdiction had been moved[43] to the Beijing No.1 Intermediate People's Court.[44]

GM executives claimed design duplication,[42] which may extend to interchangeable parts,[43] and GM China Group stated the two vehicles, "shared remarkably identical body structure, exterior design, interior design and key components."[42]

In June, 2003, General Motors, a U.S. company, sued Chery, accusing the Chinese manufacturer of copying the first generation Daewoo Matiz (developed by GM Korea) with the design for the Chery QQ.[41] General Motors then went on to accuse Chery of using a Matiz in a crash test for the Chery QQ.[41]

The Chery QQ (left) and Daewoo Matiz (right).


BYD established its North American headquarters in Los Angeles, California in 2012.[40]

Domestic dealerships have been known to take advantage of this and replace the badging of BYD vehicles with those of other car manufacturers, including Toyota.[38] Micheal Austin, vice president of BYD America, has acknowledged the issue saying that the practices done by dealers (which are franchised) has made BYD "uncomfortable".[38] Even the US government has criticized BYD's practices, with a WikiLeaked document from the US Consul-General to Guangzhou (Brian Goldbeck) referring to BYD's practice of copying in a document entitled "BYD seeks to 'Build Your Dreams' -- based on Someone Else's Designs".[38]

An anonymous staff member at Honda claimed that the BYD F3 was "a known copy" of the Toyota Corolla (with Honda Fit design cues).[38] Another model too, the BYD F1, has been described by an industry observer as "a clear copy" - this one of the Toyota Aygo.[39]

Some BYD cars may look similar to those of other brands including Lexus,[29] Toyota,[30][31] Honda,[32] Mercedes Benz,[33] [34] [35] and Porsche.[36] For example, the BYD S8 bears similarity to the Mercedes CLK from the front, and the Renault Megane CC or third generation Chrysler Sebring convertible from the rear.[37]

A BYD coupé (left) and a Mercedes-Benz CLK (right).


Several Chinese car makers have been accused of copying designs of other companies.[28]

Copying claims controversy


VW (2005)
Total motor vehicles Passenger cars Light commercial vehicles Heavy trucks
430 600 430 592


Peugeot-Citroën (2005)
Total motor vehicles Passenger cars Light commercial vehicles Heavy trucks Buses
Citroën 101 839 101 839

PSA Peugeot-Citroën

GM Shanghai & SAIC (2005)
Total motor vehicles 250365454 Passenger cars 25487 Light commercial vehicles 2654 Heavy trucks 26587 Buses
346 697 308 290 38 407

General Motors

Chang'an Motors (2005)
Total motor vehicles Passenger cars Light commercial vehicles Heavy trucks Bus and Coaches
145 498 59 827 85 671


Isuzu (2005)
Total motor vehicles Passenger cars Light commercial vehicles Heavy trucks
23 214 23 214


FIAT-Iveco (2005)
Total motor vehicles Passenger cars Light commercial vehicles Heavy trucks Buses
FIAT 32 856 32 856
Iveco 18 235 5 620 12 615


Mitsubishi (2005)
Total motor vehicles Passenger cars Light commercial vehicles Heavy trucks Buses
278 540 178 540 49 450 28 660 21 890


Daihatsu (2005)
Total motor vehicles Passenger cars Light commercial vehicles Heavy trucks Buses
1 290 1 290


Mazda-AutoAlliance (2005)
Total motor vehicles Passenger cars Light commercial vehicles Heavy trucks
107 929 107 929


Suzuki (2005)
Total motor vehicles Passenger cars Light commercial vehicles Heavy trucks
139 536 139 536



Honda (2005)
Total motor vehicles Passenger cars Light commercial vehicles Heavy trucks
254 820 254 820


Nissan (2005)
Total motor vehicles Passenger cars Light commercial vehicles Heavy trucks Buses
179 034 166 938 12 096


Toyota (2005)
Total motor vehicles Passenger cars Light commercial vehicles Heavy trucks Buses
150 078 146 943 3 635
in China. It sold 2,000 in 2006. hybrids is the only company making ToyotaCurrently


In 2005, 5,707,688 motor vehicles were manufactured in China. The following 13 foreign makers have joint venture factories, with local partners, in China.

Foreign manufacturers

Domestic manufacturers

As of 2012 exports of Chinese automobiles were about 1 million vehicles per year and rapidly increasing. Most sales were made to emerging economies such as Algeria, Brazil, Chile, Egypt, Iraq, Iran, Russia, Saudi Arabia, South Africa, or Syria[4] where a Chinese-made automobile such as a Geely, Great Wall, or Chery sells for about half of what a comparable model manufactured by a multinational brand such as Toyota does. The Chinese cars are based on multinational designs but cheaply made; they are particularly lacking in safety features. Cars made in China by multinational joint ventures are generally not exported. The quality of Chinese cars is rapidly increasing but, according to J. D. Power and Associates, is not expected to reach parity with multinational manufacturers until about 2018.[27]


There is no regulation by either the government or associations.

The profit of car dealers in China is quite high comparing to the rest of the world, in most cases 10%. This is due to the non-transparent invoice price as announced by manufactures and to the premiums they charge for quick delivery. Due to the lack of knowledge for most customers, dealers can sell add-ons at much higher prices than the aftermarket.

In most cases, brand-name new cars can be purchased only from 4S shops. For new cars in high demand, a high premium is added for instant delivery or just placing an order.

In China, authorized car dealership are called 4S car shops. The 4S represents Sale, Sparepart, Service and Survey. 整車销售(Sale)、零配件(Sparepart)、售後服务(Service)、信息反馈(Survey).

Car dealerships

Although improvements have been made in this field in the past decade, China's after-sales products and services still lag far behind those of developed countries. However, WTO commitments have brought about significant changes in the after-sales market. China's after-sales market now faces the following challenges:

Automotive after-sales products and services

Used cars can be imported to China although some restrictions apply. Refurbished heavy construction equipment can be imported with a special permit. Used and refurbished auto parts are not allowed to be imported into China.

Used motor vehicles and used/refurbished auto parts

China has agreed to lower tariffs on imported auto parts and accessories to 10%. Although this difference in duty rate was initially responsible for an increase in motorcycle and car kit imports, the loophole has been tightened. Now, only replacement parts and accessories enter China under the lower duty level.

Currently auto parts and accessories enjoy lower levels of tariffs than cars (the average tariff is 10-13% for parts/accessories and 25% for cars).

Auto parts

China subsidies oil[22] [23] [24] and some Chinese automakers see opportunities in less mature electric vehicles because Western companies have yet to develop much of a lead in the technology.[25][26]

The Chinese Automotive Industry Plan, announced on the main Web site of China's central government, said China aims to create capacity to produce 500,000 "new energy" vehicles, such as battery electric cars and plug-in hybrid vehicles. The plan aims to increase sales of such new-energy cars to account for about 5% of China's passenger vehicle sales.[20] At the 2010 Beijing Motor Show, more than 20 electric vehicles were on display, most of which came from native automakers. As of May 2010, at least 10 all-electric models have been reported to be on track for volume-production.[21] The first mass-produced plug-in hybrid car (BYD F3DM), all-electric minivan (Luxgen 7 MPV EV) and all-electric long-range bus (500 km range Zonda Bus) are Chinese.

Electric vehicles

China encourages the development of clean and fuel efficient vehicles in an effort to sustain continued growth of the country’s automobile industry (see Fuel economy in automobiles). By the end of 2007, China plans to reduce the average fuel consumption per 100 km for all types of vehicles by 10%. The proportion of vehicles burning alternate fuel will be increased to help optimize the country's energy consumption. Priority will be given to facilitating the research and development of electric and hybrid vehicles as well as alternate fuel vehicles, especially CNG/LNG. Major cities like Beijing and Shanghai already require Euro III emission standards. In 2009, Beijing will be the first city to require GUO IV emission standards (Euro IV emission standards).

Alternate fuel vehicles

China surpassed Japan to become the world's second-largest vehicle market in 2006, and passed the United States to become the largest in 2009. This growth is spurring demand for automotive parts, services, and after-care products. China is presently capable of manufacturing a complete line of automobile products and large automotive enterprises. Major domestic firms include the China First Automobile Group Corp. (FAW), Dongfeng Motor Corp. (DMC) and Shanghai Automotive Industry (Group) Corp. (SAIC).

Automobile production

China had a total of 6,322 automotive enterprises as of the end of November 2006. The total output value of the automotive sector for the first three quarters of 2006 was US$143 billion. As incomes increase the high annual growth rate of private ownership is expected to accelerate.


Several enterprises entered the automobile industry since 1994. Some of them are originated from defense industry, such as Chang'an Motors, Changhe, and Hafei Motor; some were developed from old state-owned companies, such as Japanese-Chinese BYD Auto, Brilliance China Auto, Chery Automobile, and Changfeng Automobile. Others are private-owned companies, such as Finnsh-Japanese Geely Automobile and Great Wall Motors.

1990 to present

Three big joint-ventures and three small joint-ventures:

While limiting imports, China also tried to increase local production by boosting the various existing joint-venture passenger car production agreements, as well as adding new ones. In 1983, American Motors Corporation (AMC, later acquired by Chrysler Corporation) signed a 20-year contract to produce their Jeep-model vehicles in Beijing. The following year, Germany’s Volkswagen signed a 25-year contract to make passenger cars in Shanghai, and France’s Peugeot agreed to another passenger car project to make vehicles in the prosperous southern city of Guangzhou.[17] These early joint ventures did not allow the Chinese to borrowing much foreign technology, as knock-down kit assembly made up the majority of manufacturing activities;[19] tooling may not have been allowed to slip past borders.

As this spending binge began to lead to a severe trade deficit, the Chinese leadership put on the brakes, both through propaganda efforts and by making foreign exchange much less accessible.[18] Customs duties on imported goods were raised in March 1985 and a new "regulatory tax" was added a little later. In September 1985 a two-year moratorium on nearly all vehicle imports was imposed.[18]

As domestic production was very limited, import totals rose dramatically, despite a 260 per cent import duty on foreign vehicles. Before 1984, the dominant exporter of cars to China had been the Soviet Union. In 1984, Japan's vehicle exports to China increased sevenfold (from 10,800 to 85,000) and by mid-1985 China had become Japan's second biggest export market after the US.[16] The country spent some $3 billion to import more than 350,000 vehicles (including 106,000 cars and 111,000 trucks) in 1985 alone. Three taxi companies in particular thirsted for Japanese cars, such as Toyota Crowns and Nissan Bluebirds.[17]

The passenger car industry was a minor part of vehicle production during the first three decades of China’s socialist economy. As late as 1985, the country produced a total of only 5,200 cars. To announce that the desire for consumer goods was no longer politically suspect and stimulate personal spending, while also advertising the opening of the Chinese market to foreign producers, a fabricated news story about China's first peasant to own a car was distributed across the world.[12] Sun Guiying, a chicken farmer from near Beijing was touted has having purchased a silver Toyota Publica with her earnings.[13] While the article was largely fraudulent (Mrs. Guiying did not know how to drive, and her husband was a senior official rather than a peasant),[14] the message came across loud and clear. Car sales shot through the roof, although they were almost entirely purchased by danweis (work units - private car ownership was virtually unknown at the time, in spite of the Sun Guiying story).[15]

1980 to 1990

1949 to 1980

1945,China Automotive Manufacturer made the first automobile powered by tung oil

Another general, Yang Hucheng, patronized the inventor Tang Zhongming to make a new type of mobile energized by charcoal.These charcoal cars are primary vehicles during World War II in China,considering the blockade by Japan.

Zhang Xueliang founded his arsenal to make one truck called Ming Sheng in 1931.

1928 to 1949



  • History 1
    • 1928 to 1949 1.1
    • 1949 to 1980 1.2
    • 1980 to 1990 1.3
    • 1990 to present 1.4
  • Sectors 2
    • Automobile production 2.1
      • Alternate fuel vehicles 2.1.1
      • Electric vehicles 2.1.2
    • Auto parts 2.2
    • Used motor vehicles and used/refurbished auto parts 2.3
    • Automotive after-sales products and services 2.4
    • Car dealerships 2.5
    • Exports 2.6
  • Domestic manufacturers 3
  • Foreign manufacturers 4
    • Toyota 4.1
    • Nissan 4.2
    • Honda 4.3
    • Suzuki 4.4
    • Mazda 4.5
    • Daihatsu 4.6
    • Mitsubishi 4.7
    • FIAT 4.8
    • Isuzu 4.9
    • Ford 4.10
    • General Motors 4.11
    • PSA Peugeot-Citroën 4.12
    • Volkswagen 4.13
  • Controversies 5
    • Copying claims controversy 5.1
      • BYD 5.1.1
      • Chery 5.1.2
      • Great Wall Motor 5.1.3
      • Shuanghuan 5.1.4
    • Threats to disclose industry secrets 5.2
  • See also 6
  • References 7
  • External links 8

The main industry group for the Chinese automotive industry is the China Association of Automobile Manufacturers (中国汽车工业协会).

The number of registered cars, buses, vans, and trucks on the road in China reached 62 million in 2009, and is expected to exceed 200 million by 2020.[9] The consultancy McKinsey & Company estimates that China's car market will grow tenfold between 2005 and 2030.[10]

[8] and surpassed the United States as the world's largest automobile producer by volume. In 2010, both sales and production topped 18 million units, with 13.76 million passenger cars delivered, in each case the largest by any nation in history.commercial vehicles and 3.41 million were passenger cars In 2009, China produced 13.79 million automobiles, of which 8 million were [7]

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