China's auto industry prepares for more competition

Standard & Poor''s examines whether the Chinese automotive industry is facing overcapacity and thinning margins.

Almost all of the leading car manufacturers and automotive suppliers intend to expand their business in Asia, particularly in mainland China. Currently, the country's automobile industry offers sales growth rates and profitability that are significantly higher than the industry average

Nevertheless, Standard Poor's is concerned about the supplydemand balance over the medium to long term, and believes that this market may follow the global trend of overcapacity within the next few years. In terms of profitability, it is uncertain whether original equipment manufacturers OEMs will ultimately be able to generate satisfactory returns on their large investments, given the highly uncertain nature of the mainland China market and increasing competition. In addition,...

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