Last year, China manufactured 9.3 million cars, while the United States built 8.7 million. In 2009, China will build 8.7 million autos, compared to 7.6 million for Japan.
"China's rise to the No. 2 position in global car manufacturing in 2008 marks a major milestone in China's economic ascendency and the United States' industrial decline," said Egil Juliussen, director and fellow of automotive research for iSuppli. "China during the last five years more than doubled its domestic automobile production, while U.S. manufacturing has declined by nearly 50 percent. China, which produces most of its cars for domestic sale, has benefited from its booming economy and the soaring disposable incomes of its consumers. Meanwhile, U.S. auto production has been declining steadily due to increasing imports from the NAFTA nations Canada and Mexico, as well as from Europe and Asia."
In 2003, U.S. car production surpassed that of China by nearly a factor of 3:1. In 2008, China's production exceeded that of the United States by nearly 7 percent.
Outpacing the world
China's production numbers consist of passenger-car and light-truck production from domestic companies as well as joint ventures between China and foreign automakers. The multinational companies produce about 50 percent of the autos in China. Foreign auto brands, such as Volkswagen, General Motors, Toyota and Honda are the leading auto sellers in China.
While China's car production will decline by 6.5 percent in 2009, the nation will still outperform the overall global market as well as Japan and the United States. Global auto production will fall by 25.1 percent in 2009, following a 6.6 percent decline in 2008.
Meanwhile, U.S. automakers have outsourced a major portion of their manufacturing of cars destined for the domestic market to Canada and Mexico. Japanese and European auto manufacturers also have auto production facilities in Canada and/or Mexico.
Hard hit
Japan surpassed the United States to take the global auto production lead in 2006, but is set to lose that position to China in 2009, as the global downturn in car sales hits the nation with full force.
"Japan's car production is mainly for export, with 55 percent of its manufacturing going overseas," Juliussen noted. "Although global auto sales fell by 6.6 percent in 2008, Japan barely reduced its production, with unit manufacturing falling by 0.9 percent for the year. This generated a major rise in excess inventory, which will cut Japan's production to 7.6 million units in 2009, down 33.9 percent from 11.5 million in 2008."
Japan's export shipments will decline dramatically in 2009, but the nation also is expected to suffer a 20 percent decline in domestic sales.
"The result is that China will have the lowest production cutback of any nation and will become the auto production leader in 2009," Juliussen said.
Although global auto manufacturing is expected to rebound in 2010 with a robust 10.1 percent increase and will continue to rise during the following years, China is expected to maintain its global lead at least through the year 2013, iSuppli predicted. There is a chance that Japan's auto production could rebound strongly in 2010-2011 and surpass China for a year or two, but eventually China will be the largest auto production country.
Keywords: auto production China car producer largest producer car
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