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Auto Competition Heats Up as Mainland China's Manufacturers Increase Capacity Oct 04
Standard & Poors, Oct 2004
Abstract
Almost all leading car manufacturers and automotive suppliers intend to expand their business 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 supply/demand 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 will ultimately be able to generate satisfactory returns on their large investments, given the increasing competition in the China market. However, any manufacturer that decides against investing in this industry might forego an important growth opportunity, thereby running the risk of...
Companies mentioned in this report are: Ford Motor Co.,Motors Liquidation Co. (fka General Motors Corp.),Renault S.A.,Nissan Motor Co. Ltd.,Daimler AG,Honda Motor Co. Ltd.,Toyota Motor Corp.,Peugeot S.A.,Volkswagen AG,Hyundai Motor Co.,Suzuki Motor Corp.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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