China gains greater share of automakers' investments
China boosted its share of automakers' global spending on capacity increases last year, while Mexico again attracted the bulk of North American investment, a university study says.
Automakers announced capacity investments of $9.6 billion Canadian dollars ($9.37 billion U.S. at current rates; U.S. figures are used throughout this story) on Chinese plants in 2012, or 60 percent of the global total of $15.6 billion U.S., according to the University of Windsor's Office of Automotive & Vehicle Research in Ontario. (Full report in "Related Downloads" section at left.)
In 2011, $13.2 billion in Chinese investment accounted for 57 percent of the $23.4 billion U.S. automakers spent globally.
China's tally last year outpaced the next-closest country, Mexico, by $7 billion . Russia, Brazil and United States rounded out the top five.
General Motors topped all automakers with $3.66 billion in investments. It was followed by Chrysler Group, as both companies continued to bounce back from their 2009 bankruptcies.
The survey measures investments in new assembly plants and expansion of existing factories that boost capacity. Spending on automakers' own parts plants isn't counted.
China has been the world leader in attracting investment since 2002 and captured more than half of all spending in each of the past three years, the study says.
It will reign for the foreseeable future as the country strengthens its position as the world's biggest auto market, said Tony Faria, co-director of the office.
"Sales wise, nobody is going to touch them, period," Faria said in an interview. "Production wise, the same is true given the current level of capacity to build in China -- plus, new capacity that is still piling in."
The annual survey dates back to 1995. Data is gathered from automakers and some five dozen research organizations, trade associations and publications including Automotive News.
Mexico drew $2.55 billion in capacity investments last year, more than five times the $500 million recorded in the United States. Canada, meanwhile, saw its first capacity spending since 2009: $175 million.
North American vehicle production will return to pre-recession levels by 2015, the study predicted. Most of the new capacity is forecast to come from overseas automakers and not the Detroit 3.
Worldwide production of light and medium vehicles will exceed 100 million by 2017. Nearly 86 percent of that growth will occur outside North America, the study says.
Meanwhile, Faria said Mexico will hold its own against the likes of Brazil, Russia and India -- a nation that Faria says could see a surge in investments if China reaches overcapacity.
"We always talk about Brazil, Russia, India and China as the big auto growth countries for the year ahead," Faria said. But if you look at automotive capacity investments over the last five years, "Mexico is right in there."
Faria also said Russia will attract a lot of new investments and could surpass Germany as Europe's biggest light-vehicle market within five years.
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