Rise of China's Auto Industry and Its Impact on the U.S. Motor Vehicle Industry [November 16, 2009] [open pdf - 312KB]
"The automobile industry, a key sector in China's industrialization and modernization efforts, has been developing rapidly since the 1990s. In recent years, China has become the world's fastest growing automotive producer. Annual vehicle output has increased from less than 2 million vehicles in the late 1990s to 9.5 million in 2008. In terms of production volume in 2008, China has surpassed Korea, France, Germany, and the United States, trailing only Japan. A disproportionate share of China's output was heavy vehicles in the 1990s. However, since 2000 China's growth has been led by an increase in passenger cars, which now account for more than 65% of its vehicle production. China's automobile industry has continued to expand despite the global economic downturn. From January to October 2009, more than 10 million vehicles were sold in China. If such growth continues, China is on its way to becoming world's largest auto market. Unlike Korea or Japan, China's automotive industry has developed extensively through foreign direct investment. This investment has come in the form of alliances and joint ventures between international automobile manufacturers and Chinese partners. The international automobile manufacturers are unlikely to promote Chinese exports that compete with their own products in other markets. As a consequence, the Chinese companies that have expressed a strong interest in exporting cars have not had strong ties to foreign car producers and that, consequently, may struggle to meet safety and emission standards in industrialized countries."
CRS Report for Congress, R40924
U.S. Department of State, Foreign Press Center: http://www.fpc.state.gov/