German automotive industry now has over 340 facilities and 95,000 employees in the largest vehicle market – VDA Managing Director Klaus Bräunig chairs Round Table with German suppliers at the Auto China in Beijing
The Chinese passenger car market again showed strong growth in the first quarter of 2016. Sales rose by 9.4 percent to 5.45 million units. In March the market added 12.4 percent. VDA Managing Director Klaus Bräunig said at the Auto China in Beijing, “In the first three months of the year the Chinese passenger car market was more robust than many had expected. The double-digit growth in March in particular brought marked first-quarter expansion on the world’s largest car market. For 2016 as a whole we expect a rise of 6 percent to 21.3 million new cars. That is an important message for our manufacturers and suppliers because they still regard China as a major sales market and production location.” Bräunig is visiting Beijing for the Auto China. The automotive trade fair takes place every two years, alternating with the Auto Shanghai – this year sees the 14th Auto China, and 1,600 exhibitors from 14 countries are expected. Nearly all the German passenger car manufacturers are represented, along with many German suppliers.
In 2015 the German OEMs again took a large share of the Chinese passenger car market. Last year they sold 4 million cars in China, which gave the German group brands a market share of around 20 percent for the entire year. Bräunig commented, “Compared with 2010, the German group brands have doubled their sales here, and compared with 2008 they have actually quadrupled. More than one new car in five sold in China bears a German badge.”
Concerning the future of the Chinese passenger car market, Bräunig stressed, “Future growth rates will generally settle down to single figures, but with a much higher baseline than a decade ago – China remains the world’s largest market for passenger cars. Its potential is nowhere near exhausted.” Bräunig explained that the structural conditions in China favored the market: “China’s young, rapidly growing middle class wants to have individual mobility. The potential demand is large: vehicle ownership in China is still around 70 passenger cars per 1,000 inhabitants. In Germany there are over 540 cars for every 1,000 inhabitants.”
In the next few days VDA Managing Director Klaus Bräunig, who is also responsible for the IAA, will speak with the German and Chinese automotive industries, Chinese representatives responsible for the trade shows, industry associations and the Beijing city administration, in support of the VDA’s members. According to a recent VDA survey of its members, the number of sites operated by German suppliers and manufacturers in China has risen from almost 200 in 2010 to over 340 today. And 314 of them are facilities run by suppliers. The number of employees has also increased – to around 95,000. Worldwide the VDA’s members have nearly 3,100 sites outside Germany, which is more than twice as many as in the last decade. Of these, 2,700 are suppliers’ sites.
On Wednesday Bräunig will chair the VDA’s 11th Round Table China, where the Chinese bosses at German suppliers will once again hold discussions with a local OEM. The agenda will include the aftermarket, standardization and logistics. In view of China’s huge importance as a sales and production location, the VDA operates an office and a Quality Management Center in Beijing.
Bräunig welcomed the negotiations on an investment agreement between China and the EU: “Obligations to participate in joint ventures and the protection of intellectual property are important topics when it comes to investing in China. Each host country should treat foreign investments in the same manner as those from domestic investors. An agreement of this type creates additional potential for deepening the cooperation between China and Europe. We are working toward that goal.”