· Shanghai Automotive Industrial Corp (SAIC)
· First Auto Works (FAW) Group
· Dongfeng Automobile
· Chang’An Automotive
· Beijing Automotive Industrial Corp (BAIC)
· Guangzhou Automotive Industrial Group (GAIG)
· Chery Automobile
· China Heavy Duty Truck Corp (CNHTC)
It is noteworthy that this is not a final list of surviving companies as it represents only 8 of the “top 10”, and by calling it “top” 10 there is obviously room for others below the “top”. One can anticipate that OEM consolidation and rationalization will surely be accompanied by a major restructuring of the Chinese auto supply base. It is also noteworthy that companies such as BYD, Geely and Great Wall are not included on the list. In spite of this, there is a clear indication of the rationale and urgency around the issue of consolidation, and why the time to act is now.
But, how does a restructuring of the domestic structure in a single auto market revolutionize the global auto industry? Taken as a stand-alone trend, it certainly is not sufficient enough to unleash a global transformational force. However, one must consider the fact that we are talking about the largest and still rapidly expanding China auto market. By seizing on the financial crisis as a triggering event to drive forward the necessary consolidation, the China government is ensuring that it can more efficiently develop the industry around the fewer, and stronger auto groups that remain. This is a necessary foundation-building step from which fewer, yet stronger China auto companies can emerge. While providing a base, it is the cumulative impact of this trend along with the remaining seven yet to be described that will revolutionize the business model of the global automotive industry.
In the next posting, I will describe the trend of "Global Redistribution of Assets to Capture China Market Growth".
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