TRAVERSE CITY, Mich.-- Chinas global production will be second to only the United States by 2013, according to a forecast by CSM Worldwide.
Eventually, China could become a source for exports, both in vehicles and components, to mass markets, said Michael Robinet, the consultants vice president of global forecast services.
Were fairly strong on China, he said yesterday at the Management Briefing Seminars. We think theres going to be growth in both sales and production. Eventually China could become a source for exports, but dont look for that to form any time soon.
Robinet said that between 2002 and 2008, Chinas vehicle production will grow at a compounded annual rate of 15 percent, with production hitting 6.3 million in 2008.
China will be fourth largest in vehicle production by 2004, behind the United States, Japan, and Germany; third largest by 2006; and second largest by 2013.
When it begins to export its vehicles, China will first do so on a regional basis in Southeast Asia, Robinet said.
Then eventually toward the end of the decade we could start seeing Chinese-built B- and C- segment vehicles in several locations in mass markets such as the U.S. and Western Europe, as well as Japan, Robinet said.
Fueling production growth in China are an emerging middle class, the strong gross domestic product growth rate, its entry into the World Trade Organization, and several other factors.
China also is important from a suppliers perspective, Robinet said.
While automakers locate more production in China, they are feeding a domestic market that is running at strong growth rates.
We feel China is certainly important from a vehicle basis, but to the supply base, even more important as a source of components, Robinet said. They know in the back of their minds that there is the strong possibility to export globally accepted components off globally built platforms in China.
Robinet also said that:
*North American vehicle production is well into a dramatic shift south. Production volumes between 1993 and 2008 in Mexico will grow 111 percent, and in the South by 91 percent.
*The most important issue in contract talks between the Big 3 and the UAW is getting more flexibility on how they produce vehicles.
*Emerging markets such as China, South Korea, Thailand, the Czech Republic, and Slovakia will lead the world in incremental sales growth.