GlobalAutoIndustry.com Publication of "The Path to Globalization of China's Automotive Industry"

ASIAtalk eJournal, June 2009

China is the world’s factory for “everyday low price” merchandise. Sara Bongiorni’s amusing yet engaging book titled A Year Without ‘Made In China’ chronicles an American family’s futile attempt to boycott purchases of Chinese products for one year. The unexpected challenges of fulfilling such a resolution were felt when attempting to purchase footwear, eyewear, clothing, print cartridges, children’s toys, mousetraps and many other things. According to the US Census bureau, the trade deficit with China in 2008 stood at $266.3 billion, with China imports valued at $337.8 billion compared with US exports valued at $71.5 billion. The message is clear: China dominates the production of everyday household goods. It just seems logical to assume that it’s simply a matter of time before China becomes an exporter of the most symbolic cultural icon: the automobile. In this second article in a 3-part series on the China auto industry, Bill Russo describes the challenges faced by Chinese original equipment manufacturers (OEMs) in going global, and will highlight the role of Mergers and Acquisitions (M&A) as a plausible but high-risk means of accelerating this process.

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