China Sector Watch Automobiles China Briefing News — Volkswagen Santana Vista

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Volkswagen Santana Vista

China Sector Watch:

Posted on May 29, 2009 by China

This ongoing series an in-depth look at the industries are shaping the Chinese economy

By Joyce Roque

May 29 – It was in 1901 automobiles first came to mostly in the streets of Shanghai. automobiles were usually from America and used by During that time, did not have enough paved to make the use of automobiles convenient for It would only be in 1956 the automobile factory, First Works, would begin cars in the country.

It is during period that today’s automobile manufacturers would their roots – the Nanjing Corporation, Shanghai Automotive Corporation (SAIC), China Heavy Duty Truck and the Beijing Automotive Industry Corporation.

After the Cultural China’s reforms led to a full-throttle capitalism. Chinese citizens encouraged to go out and make their own Industries were laid to foreign investment and export This would feed double digit growth in the years and fatten its foreign

The economic reforms included being made for its automobile A first-time visitor to Shanghai notice the proliferation Volkswagen on the street, a lot of these models used as cabs.


The German company was an early and saw the potential of the Chinese market. It was one of the foreign entrants to China’s markets in 1978 before with the SAIC to form a venture –the Shanghai Automotive – on October 1984. Group China also with FAW in 1991. Today, VW a strong presence in the country and is top carmaker overall.

It will its partnership with the Shanghai Automotive until 2030.The Volkswagen joint–venture makes under the Volkswagen and the Skoda with SVW offering six model including Volkswagen Santana, Vista, Passat, Polo, Lavida and Skoda Octavia.

VW, the top 5 car brands in the country are Hyundai, Honda and Nissan. Unlike Motor’s troubled finances in the States, its Chinese subsidiary has smarter to adopt to the needs of the market making it one of the company’s earning global subsidiaries.

reports dated early May say GM will be moving its manufacturing out of the United States to cut on costs. GM is to sell Chinese-made vehicles to the and North American market; small cars like the Spark.

By 2011, GM will begin 17,335 cars until raising the volume to 51,546 by 2014. It will be an ironic of events the first importer of cars will be coming a top American car manufacturer.

The Shanghai Show

If last April’s show in Shanghai is any barometer, and local car brands are now looking at the market with renewed China’s automobile market was the one that showed promising in what has become a sobering in a global market hampered by an crisis- depressed demand.

For the four months of the year, was the largest automobile market in the with total sale of million vehicles overtaking the States. China may even the largest car market in the world by the end of the given the United States’ crisis which squelched demand.

The auto show a glimpse of what the future of the market would be. Global car competing with the best of the local market can offer. brand, Geely introduced its new Englon. State-owned Chery Co. maker of the best-selling subcompact QQ, its new sedan, Riich, for more buyers.

It was during the eve of the Shanghai show that Porsche unveiled its luxury sedan, the A first for a company that in the would formally enter a new segment only at auto in the United States or Europe.

German automaker Mercedes-Benz its roster of 35 models. The largest of cars brought in by the brand for the Chinese market. The car brand is well in China with than 11,000 units during the first quarter of the

Honda predicts that its sales will expand by 10 to 520,000 units. For the Shanghai Show, GM brought in 37 vehicles and cars with the hopes of sales to 2 million units in the five years. For the first of the year, GM sold 363,701 in China, an increase of 16.8 from the same period year.

It is clear that all car makers are upbeat on the prospects of the market. In March, auto increased by 37 percent. It was during time that the Ministry of announced new car subsidies for farmers their old vehicles worth as as US$731.

Volkswagen Santana Vista

Beijing has said it is a sales figure of 10 million by the end of the year and released a US$700 package to help the auto Already the government has implemented that would encourage people to buy cars as part of its to increase local demand. also include tax breaks and incentives for companies producing and low-emission vehicles. Purchase tax was cut by in January for cars with below 1.6 liters.

The next Detroit?

The global crisis can be seen as both a and a bane for China’s economy. On one it has crippled exports, a major of China’s GDP at 40 percent in 2007. has led to widespread factory closures in the Province and an alarming jump in On the other hand, the crisis has urgency for China to implement reforms and finally change its strategy to include a focus on the market and not just solely on exports.

For its burgeoning auto Beijing is aiming to make the at being the world’s leading of hybrid and electric vehicles in the three years. A cleaner and competitive version of America’s may be on its way.

China is providing subsidies for electric car designs and tax for consumers buying alternative vehicles. A US$220 million will be available to provide for companies wanting to upgrade technology with an emphasis on vehicles.

China wants to raise its production capacity to 500,000 or all-electric cars and buses by the end of from 2,100 last government officials and Chinese executives told The New York .

The government has gone a step by providing subsidies worth each for taxi companies and government agencies buying vehicles. Accordingly, state grid has been tasked to electric car charging stations in cities like Beijing, and Shanghai.

China’s plan to on its alternative-energy vehicles will several benefits should the prove successful. The most benefit is it will remedy the of urban pollution by reducing gases. Moreover, it will China’s reliance on oil which is bought from Middle suppliers and travels via sea routes to foreign military intervention.

The crisis also gives the opportunity to turn one of its top local into a world-renowned one. Be it Geely or BYD, the tougher climate will be better for the industry as a whole by consolidating the manufacturers with the strong Chinese car manufacturers are still by quality-control issues. Some auto brands produce copies of popular foreign without the benefit of marketing or testing. This time, foreign car manufacturers benefit more experience, local car will have the advantage of run and favored by the government.

The push towards the development of the industry also complements plans to improve its highway The economic stimulus plan last year is mostly at infrastructure projects. Currently, has built 30,000 kilometers of Sales demand for vehicles are predicted to be moving inland of an emerging trend for more small cars coming outside China’s big cities.

China is doing now as a whole and so for the auto industry, is to create in a time of serious crisis; emerging stronger if not unscathed.

Volkswagen Santana Vista
Volkswagen Santana Vista

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