There is a great potential for the auto market growth in China. It is predicted that the market will exceed that of the United States in 2015, says a joint research report released by the IBM Commercial Consultancy Services and the Communication Research Institute under the University of Michigan on November 30.

The report says the output of China autos increased from 220,000 in 1993 to 2.34 million in 2004. It is expected that China's output will surpass that of Germany in 2007, becoming the third largest automaker in the world, only next to the United States and Japan.

It continues to say at the present, there are 24 autos for each 1,000 people in China, still far behind global average of 120 and the US average of 750. That means a great potential for auto market growth in China. China's auto sales were about 5 million last year while the US market sales reached 17 million.

Nevertheless, the report believes that there will be many obstacles for the auto industry in China. If automakers in the country want to have global competitiveness in auto design, manufacture and sales, 10 to 20 years will likely be needed for China. For the moment, only 3 per cent of the autos produced by China have been exported overseas.

The report is compiled on the basis of interviews with 20 leaders in China's auto sector. The report has found that most of the interviewees believe that auto producers and suppliers will need 20 years' time to narrow the gaps in the areas of products and sales with their world-class rivals. Although China has set up joint ventures with transnational automakers, Chinese officials in auto sector ��still feel that the core technologies are still in the hands of foreign automakers��.

The report believes the insufficient infrastructure will restrict the development of the auto industry in China. For example, there are only about 85,000 oil stations in the country, and most of them are located in urban areas while in the United States, there are 170,000 stations. Car parking is also a big problem in big cities like Shanghai. Loan business for auto purchase is not mature. Most buy new autos in cash.

By People's Daily Online