China Automakers Might not Expand due to Weakening Demand

By Soko Directory Team / March 30, 2016




China has been on the world map for her stunning technology especially in the world of automobiles. Many world-class companies are found in China and the country has long passed the United States of America as the king of industry. The automobile industry in China, however, is likely to face hurdles in terms of expansion due to the weakening demand in the recent years as many people shift to other countries.

Take Cadillac Factory for instance, the world’s magnificent automaker factory  situated on the outskirts of Shanghai is a home to the world’s most developed technology that everyone in the world would love to have but cannot afford. The factory is worth 1.3 billion US Dollars. The factory utilizes hundreds of robots that are used to assemble cars and other machinery within Cadillac.

Cadillac is part of the expounding market in the world of automobiles in China. China has been the world’s largest market for new cars and many companies have been rushing to open up their outlets in the country for the last 15 years. This however is set to reduce as the economy of china is slowly drifting downwards leaving the car manufacturing industries with so many cars and factories but no customers.

This comes as another largest car manufacturer General Motors plans to open a second plant in China, a one billion US Dollar plat in Wuhan early next year. At the same time, Volkswagen plans to open a series of large assembly plants next year in Foshan, Ningbo and Yizheng cities.

According to research firms and economic analysts, the car manufacturing market in China will rise by 22 percent over the next two years. This implies that Chine will be producing 28.8 million cars annually making it the world largest producer and ahead of American and European Markets combined. The worry, however, lies on the market as projections are that the purchase is likely to go down.

Many companies are rushing to the Chines market to expand their business at a time where the general economy of China is at its lowest in more than a quarter a century. The recent economic shocks came when the country decide to close down coal mines across the whole country and also plans to do away with steel mills, some of the greatest revenue earners.

The Chines exports have also fallen significantly and according to analysts, this is likely to hurt the world economy.


Article by Juma Fred.

 



About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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