A decade of change: new report reveals mega trends shaping the light vehicle industry in China
London, 16 December 2011 – Nine mega trends have been identified that will significantly impact the revenues, costs and profitability of the Chinese auto industry; the world’s largest market.
Mega trends shaping the Chinese light vehicle industry, a report by Ernst & Young, looks at diverse trends influencing vehicle manufacturers, suppliers and dealers on multiple fronts in the fast moving light vehicles market, which grew by 30% in 2010 and is expected to defy expectations with an average growth rate of approximately 10% over the next five years. The report encourages those operating in China to seize opportunities by leveraging their ability to innovate and remain flexible.
The nine mega trends shaping the light vehicle industry are:
- Government and impact of motorization accelerates the introduction of sustainable mobility solutions
- Diversity of demand amplifies across China
- Demand and competition drives driving proliferation of products and state-of-the-art in-vehicle technologies by Original Equipment Manufacturers (OEMs)
- Disparity between market size and Research and Development (R&D) capacity drives investments across research functions
- Information and Communication Technology (ICT) and social media drives paradigm shift in industry’s sales, marketing and supply chain management functions
- New entrants and innovative business models take the lead on connectivity, electrification and mobility
- Global OEMs aim for “glocalization” while local OEMs attempt globalization
- New risks challenge OEMs to devise responsive operational strategies and effective risk management systems
- Suppliers build local capacities to capitalize on Original Equipment (OE) and aftermarket opportunities
Commenting on the report, Mike Hanley, Global Automotive Leader, Ernst & Young, says: “China is an important growth market for the automotive industry. It’s crucial for any company involved in this market, whether global or local, to anticipate the trends defining this growth. This report is significant for all players in the Chinese market, as it looks at the diverse trends influencing vehicle manufacturers, suppliers and dealers on multiple fronts. It also encourages those operating in the industry to seize opportunities by leveraging their ability to innovate and remain flexible. ”
James Wu, Asia-Pacific Automotive Leader, Ernst & Young, says: “The Chinese auto industry defied the global recession to become the largest market for light vehicles. As growth cools and competition heats up, automotive companies across the value chain must carefully evaluate their investments in China to not only establish a strong local presence, but also protect their global competitive position.”
Notes to editors:
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