China to stop allowing new car factories

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Thread: China to stop allowing new car factories

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    China to stop allowing new car factories

    China's New Rules: Tesla Must Stay Home, Used Car Factories Go Up In Price

    China has effectively closed its doors to any new carmakers wanting to produce in the world’s largest automakers, a report in Beijing-based business publication Caixingglobal said. Capacity expansion by domestic automakers, and by joint ventures with overseas OEMs, also will be heavily curtailed.

    China’s powerful state planner, the National Development and Reform Commission (NDRC) outlined projects that won’t get its approval under the policy, “covering most new investments for car production,” China’s most authoritative financial news source said.

    Some expansion of existing car-producing ventures can be allowed under strict conditions. Capacity utilization must be redlining, and pledges for more new-energy vehicles must be made.

    For nearly a decade, China has suffered from rampant overcapacity. Some 28 million units were sold in China last year. Production capacity in the country should be good for twice that amount. In the auto industry, capacity utilization above 80% is seen as healthy. China is generally seen at 50%. For more than a decade, Chinese planners have called for a drastic consolidation of its more than 100 automakers.



    https://www.forbes.com/sites/bertels.../#350ff7444b16

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    Re: China to stop allowing new car factory's

    China has USED CAR FACTORIES??!!

    I must say, they are getting way ahead of the game! Why the hell didn't we think of this?
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    Re: China to stop allowing new car factory's

    So they just need to buy existing car factories to expand....

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    Re: China to stop allowing new car factory's

    That's good for Buick!

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    Re: China to stop allowing new car factory's

    This is exactly the sort of state meddling that makes me not worry too much about Chinese competitors (at least in markets outside China). Consolidation would have happened anyway when the industry is ready for it, like it did in the US in the early/mid 1900s. Trying to force a major industry's hand hardly ever works as planned.

    OTOH, there may end up being many exceptions to the rule that it may not matter all that much (at least for the companies with the right connections). Just like how a lot of my Chinese-born friends have siblings although they were born during the days of the one-child policy.
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    Re: China to stop allowing new car factory's

    A side effect of this could be a reduction of urban decay. This forces the strong companies to use existing plants instead of building new ones,vs letting the secondary companies go out of business and the factories simply decaying. Though with 50% of the plants being unnecessary sounds like no matter what some plants just aren't needed. Which is a similar story for a lot of other Chinese industries. China looks to be a place of huge urban blight in the future.

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    Re: China to stop allowing new car factory's

    Quote Originally Posted by BlackGTP View Post
    China looks to be a place of huge urban blight in the future.
    Future? China has huge swaths of urban blight and abandonment now!

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    Re: China to stop allowing new car factory's

    I see GM China getting hosed.

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    Re: China to stop allowing new car factory's

    Quote Originally Posted by Carbide View Post
    I see GM China getting hosed.

    Maybe, maybe not. But the alarm bells should be going off to all of those bureaucrats who have put China ahead of North America when it comes to product development.
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    Re: China to stop allowing new car factory's

    Massive consolidation of it's automakers which number over 100. This should prove to be interesting.

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    Re: China to stop allowing new car factory's

    Quote Originally Posted by Carbide View Post
    I see GM China getting hosed.
    Why? I would be more worried about the bulk of the 100 Chinese automakers that will likely consolidate over the years. Overcapacity by 50% should mean some deals on utilizing a factory that is already built, as long as the investment to get it up to US standards isn't cost prohibitive.

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    Re: China to stop allowing new car factory's

    Quote Originally Posted by 1958carnut View Post
    Massive consolidation of it's automakers which number over 100. This should prove to be interesting.
    Yeah I'd keep my eye on Geely. Something tells me they're big enough to buy several smaller automakers,

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    Re: China to stop allowing new car factory's

    Quote Originally Posted by BlackGTP View Post
    A side effect of this could be a reduction of urban decay. This forces the strong companies to use existing plants instead of building new ones,vs letting the secondary companies go out of business and the factories simply decaying. Though with 50% of the plants being unnecessary sounds like no matter what some plants just aren't needed. Which is a similar story for a lot of other Chinese industries. China looks to be a place of huge urban blight in the future.
    Of course.

    For nearly a decade, China has suffered from rampant overcapacity. Some 28 million units were sold in China last year. Production capacity in the country should be good for twice that amount. In the auto industry, capacity utilization above 80% is seen as healthy. China is generally seen at 50%. For more than a decade, Chinese planners have called for a drastic consolidation of its more than 100 automakers.
    What this says to me is that there are plenty of mainstream automakers at 80%+ capacity, and all the upstart chingchong xingxao brands with plans for world and domestic domination have a lot of failures under their collective belt.

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    Re: China to stop allowing new car factories

    Originally, the Chinses planned to partner every Foreign bran in the hopes that eventually,
    sales would begin to swing back towards the local brands as the experience and quality level
    improved...

    The learning curve for the Chinese is that the Chinese people prefer the Western and Asian brands
    to their local domestic brands - the transition of sales to those local brands has pretty much failed.

    I wonder if the concern now is that the foreign brand are too popular and infact taking a lot of money
    and developed IP out of the country....

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    Re: China to stop allowing new car factory's

    Quote Originally Posted by sfbreh View Post
    Of course.



    What this says to me is that there are plenty of mainstream automakers at 80%+ capacity, and all the upstart chingchong xingxao brands with plans for world and domestic domination have a lot of failures under their collective belt.
    I would agree with you except for the fact that these are at least partly own by the Government either local or national.

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