China urges carmakers to merge in order to consolidate the market | Rpmgo.com



China is quickly becoming one of the largest car markets in the world, mostly due to the big number of potential customers.

Seeing as how the market is so large, domestic carmakers have been popping up all over the country (what you see above are just a selection of car logos found in the Asian country). This has now led to over 130 different companies producing cars for the Chinese public. Now we don’t know about you, but even at over 1 billion potential customers, that’s still a lot.

What’s worse is that, according to a recent study, most of these companies sell under 10,000 units each year, and just five big manufacturers achieve the 1 million mark. As such, China’s government, through the Ministry of Industry and Information Technology, has announced a new set of rules, which will push carmakers into acquiring or merging with other companies.

If a Chinese car company wants to create a new production plant, it must acquire another carmaker, in order to trim the ranks and make the market more competitive. Another goal of this new plan is to export around 20% of local car production to other countries, a fact that can be achieved around 2015, according to the government.

Source: Autocar
Photo Source: MadAboutShanghai


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Post tags : asia, car company, carmaker, china, government