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China's Impact on the U.S. Automotive Industry

Source: www.fas.org
Topic: Automotive Industry

Sort Desciption: China’s automotive industry may be the most important development in the ... In 1988, after a visit to China and its fledgling automotive industry, then- ...

Content Inside: Congressional Research Service ˜ The Library of Congress CRS Report for Congress Received through the CRS Web Order Code RL33317 China’s Impact on the U.S. Automotive Industry Updated April 4, 2006 Stephen Cooney Industry Specialist Resources, Science, and Industry Division China’s Impact on the U.S. Automotive Industry Summary China is both the fastest growing motor vehicle market and the fastest growing vehicle producer. Output and sales have grown from less than two million vehicles annually before 2000 to nearly six million vehicles in 2005. In the number of vehicles that it manufactures China has passed Korea and France, is on pace to overtake Germany, and would then trail only the United States and Japan. A disproportionate share of China’s output has always been heavy vehicles, but since 2000, China’s growth has been led by the increase in passenger cars. They now account for about half of China’s production. China exports or imports few motor vehicles: less than 200,000 of each. Exports are growing much more rapidly than imports and are mostly light trucks shipped to developing countrymarkets in Asia, Africa and the Middle East. China’s industry has developed extensively with the aid of foreign direct investment, unlike those of Korea and Japan. This investment has been from major international automobilemanufacturers, led byGeneral Motors (GM), that are unlikelyto promote Chinese exports in competition with their own products in other markets. As a consequence, theChinesecompanies thathave expressed an interestinexportingcars are those who are less dependent on such cooperation and may struggle to meet safetyand emission standards in industrial countries. Most experts do not see a high volume of exports from China into these markets in the near future. By contrast, Chinese auto parts exports are already making inroads into the United States. While U.S. motor vehicle trade with China was insignificant in 2005, the United Sta ...

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