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China – Travel by Automobile

Published Saturday, May 25, 19 | By PaulvHill

The automotive industry in China has been the largest in the world measured by automobile unit production since 2008. Since 2009, annual production of automobiles in China exceeds that of the European Union or that of the United States and Japan combined.

The traditional “Big Four” domestic car manufacturers are SAIC MotorDongfengFAW and Chang’an. Other Chinese car manufacturers are GeelyBeijing Automotive GroupBrilliance AutomotiveGuangzhou Automobile GroupGreat WallBYDChery and Jianghuai (JAC). In addition, several multinational manufacturers have partnerships with domestic manufacturers.

While most of the cars manufactured in China are sold within China, exports reached 814,300 units in 2011. China’s home market provides its automakers with a solid base and Chinese economic planners hope to build globally competitive auto companies that will become more and more attractive and reliable over the years.

China’s automobile industry had mainly Soviet origins (plants and licensed auto design were founded in the 1950s, with the help of the USSR) and had small volumes for the first 30 years of the republic, not exceeding 100–200 thousand per year. Since the early 1990s, it has developed rapidly. China’s annual automobile production capacity first exceeded one million in 1992. By 2000, China was producing over two million vehicles. After China’s entry into the World Trade Organization (WTO) in 2001, the development of the automobile market accelerated further. Between 2002 and 2007, China’s national automobile market grew by an average 21 percent, or one million vehicles year-on-year. In 2009, China produced 13.79 million automobiles, of which 8 million were passenger cars and 3.41 million were commercial vehicles and surpassed the United States as the world’s largest automobile producer by volume. In 2010, both sales and production topped 18 million units, with 13.76 million passenger cars delivered, in each case the largest by any nation in history. In 2014, total vehicle production in China reached 23.720 million, accounting for 26% of global automotive production.
The number of registered cars, buses, vans, and trucks on the road in China reached 62 million in 2009 and is expected to exceed 200 million by 2020. The consultancy McKinsey & Company estimates that China’s car market will grow tenfold between 2005 and 2030.

The main industry group for the Chinese automotive industry is the China Association of Automobile Manufacturers (中国汽车工业协会).

annual production of automobiles in China exceeds that of the European Union or that of the United States and Japan combined.

The traditional “Big Four” domestic car manufacturers are SAIC MotorDongfengFAW and Chang’an. Other Chinese car manufacturers are GeelyBeijing Automotive GroupBrilliance AutomotiveGuangzhou Automobile GroupGreat WallBYDChery and Jianghuai (JAC). In addition, several multinational manufacturers have partnerships with domestic manufacturers.

While most of the cars manufactured in China are sold within China, exports reached 814,300 units in 2011. China’s home market provides its automakers with a solid base and Chinese economic planners hope to build globally competitive auto companies that will become more and more attractive and reliable over the years.

China’s automobile industry had mainly Soviet origins (plants and licensed auto design were founded in the 1950s, with the help of the USSR) and had small volumes for the first 30 years of the republic, not exceeding 100–200 thousand per year. Since the early 1990s, it has developed rapidly. China’s annual automobile production capacity first exceeded one million in 1992. By 2000, China was producing over two million vehicles. After China’s entry into the World Trade Organization (WTO) in 2001, the development of the automobile market accelerated further. Between 2002 and 2007, China’s national automobile market grew by an average 21 percent, or one million vehicles year-on-year. In 2009, China produced 13.79 million automobiles, of which 8 million were passenger cars and 3.41 million were commercial vehicles and surpassed the United States as the world’s largest automobile producer by volume. In 2010, both sales and production topped 18 million units, with 13.76 million passenger cars delivered, in each case the largest by any nation in history. In 2014, total vehicle production in China reached 23.720 million, accounting for 26% of global automotive production.

The number of registered cars, buses, vans, and trucks on the road in China reached 62 million in 2009 and is expected to exceed 200 million by 2020. The consultancy McKinsey & Company estimates that China’s car market will grow tenfold between 2005 and 2030.

The main industry group for the Chinese automotive industry is the China Association of Automobile Manufacturers (中国汽车工业协会).

History

1928 to 1949

The first Chinese built motor vehicle was a truck called the Ming Sheng. It was designed by Daniel F Myers and a prototype was made at the Liao Ning Trench Mortar Arsenal, Shenyang. The prototype was completed on May 31, 1931, for Zhang Xueliang. Prior to production commencing, the factory was bombed by the invading Japanese and production never commenced. A fellow general, Yang Hucheng, patronized the inventor Tang Zhongming to make a new type of automobile engine powered by charcoal. In 1932 Tang founded the Chung Ming Machinery Co. Ltd. in Shanghai to produce the engines. Charcoal powered vehicles were mainly used during the Second Sino-Japanese War in China because of fuel shortages. Tung oil was also used during the war as a petroleum substitute. One source states that Du Yuming designed a car in 1937, but did not make it until 1943 after having been forced to move because of the war. No further information has been found about it.

1949 to 1980

Several vehicle assembly factories were set up in the 1950s and 1960s. They were Nanjing (today is Nanjing Automobile (Group) Corporation), Shanghai (today is Shanghai Automotive Industry Corporation), Jinan (evolving into China National Heavy Duty Truck Group), and Beijing (today is Beijing Automotive Industry Holding Corporation). The Second Automobile Works (later Dongfeng Motor Corporation) was founded in 1968.

The first Chinese production vehicles were made by the First Automobile Works in 1956, a truck called the Jiefang CA-30. This was followed on March 10, 1958, by the 2½ ton light duty truck (NJ130), which was based on the Russian GAZ-51, was produced in Nanjing. The truck was named Yuejin (meaning “leap forward”) by China’s First Ministry of Industrial Machinery.

In June 1958 the Nanjing Automobile Works, previously a vehicle servicing unit of the Army, was established. Production continued until the last truck (NJ134) rolled off the assembly line on July 9, 1987. Cumulative production was 161,988 units (including models NJ130, NJ230, NJ135 and NJ134). The first production automobiles were the Dongfeng CA71Hongqi CA72, Feng Huang (later known as the Shanghai SH760) all from 1958.

1980 to 1990

The passenger car industry was a minor part of vehicle production during the first three decades of China’s socialist economy. As late as 1985, the country produced a total of only 5,200 cars. To announce that the desire for consumer goods was no longer politically suspect and stimulate personal spending, while also advertising the opening of the Chinese market to foreign producers, a fabricated news story about China’s first peasant to own a car was distributed across the world. Sun Guiying, a chicken farmer from near Beijing was touted as having purchased a silver Toyota Publica with her earnings. While the article was largely fraudulent (Mrs. Guiying did not know how to drive, and her husband was a senior official rather than a peasant), the message came across loud and clear. Car sales increased dramatically, although they were almost entirely purchased by danweis (work units – private car ownership was virtually unknown at the time, in spite of the Sun Guiying story).
As domestic production was very limited, import totals rose dramatically, despite a 260 percent import duty on foreign vehicles. Before 1984, the dominant exporter of cars to China had been the Soviet Union. In 1984, Japan’s vehicle exports to China increased sevenfold (from 10,800 to 85,000) and by mid-1985 China had become Japan’s second biggest export market after the US. The country spent some $3 billion to import more than 350,000 vehicles (including 106,000 cars and 111,000 trucks) in 1985 alone. Three taxi companies, in particular, thirsted for Japanese cars, such as Toyota Crowns and Nissan Bluebirds.

As this spending binge began to lead to a severe trade deficit, the Chinese leadership put on the brakes, both through propaganda efforts and by making foreign exchange much less accessible. Customs duties on imported goods were raised in March 1985 and a new “regulatory tax” was added a little later. In September 1985, a two-year moratorium on nearly all vehicle imports was imposed.

While limiting imports, China also tried to increase local production by boosting the various existing joint-venture passenger car production agreements, as well as adding new ones. In 1983, American Motors Corporation (AMC, later acquired by Chrysler Corporation) signed a 20-year contract to produce their Jeep-model vehicles in Beijing. The following year, Germany’s Volkswagen signed a 25-year contract to make passenger cars in Shanghai, and France’s Peugeot agreed to another passenger car project to make vehicles in the prosperous southern city of Guangzhou. These early joint ventures did not allow the Chinese to borrow much foreign technology, as knock-down kit assembly made up the majority of manufacturing activities; tooling may not have been allowed to slip past borders.

Three big joint-ventures and three small joint-ventures:

1990 to present

Several enterprises entered the automobile industry since 1994. Some of them are originated from the defense industry, such as Chang’an MotorsChanghe, and Hafei Motor; some were developed from old state-owned companies, such as BYD AutoBrilliance China AutoChery Automobile, and Changfeng Automobile. Others are private-owned companies, such as Geely Automobile and Great Wall Motors.

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