The Chinese government is set to reveal plans towards the end of this year to encourage mergers and acquisitions between China’s car makers. The idea is simple, through mergers and alliances stronger Chinese car companies will arise to increase the sector’s growth.
Last year the Chinese car market become the world’s largest, overtaking the United States for the first time in history.
Nonetheless only a handful of the 130 car makers in China have annual sales exceeding 10,000 units with China’s top 10 car makers making up 87 per cent of all sales.
European manufacturers have taken a strong presence in China to capitalise on the boom.
The Chinese government wants to prohibit car makers from building new plants unless they acquire an existing manufacturer first.
Beijing seeks to mimic European and American car makers by reducing the number of smaller car companies and focus on creating a couple of major car makers with production capacities exceeding two million units by 2012.
The restructuring is part of the government’s 2015 grand plan to be more globally competitive, with a fifth of Chinese car makers’ sales coming from exports.
Source: Autocar UK