From HSBC can build on a level of 95 per 1000 by 2015

Is there the production overcapacity in automobile in China More than a dozen mills are now in project in the Middle Kingdom. By the sum of the objectives of Chinese manufacturers, the production capacity of the country should exceed the 30 million vehicles on the horizon of 2015, then even that sales should be between 20 and 25 million cars to this deadline.

The Government has already sounded the alert on three occasions and has a list of companies that will consolidate the automobile, currently very fragmented sector with more than 80 manufacturers. But this concentration is not clear where these constructors are often at the hands of the municipalities, with no interest to their local business to promote employment.

At this delicate situation adds a paradox: the plants already in service are far from being saturated. After Christian Marsais, Director of the equipment manufacturer Valeo in China, "capabilities are used approximately two thirds currently". Will there be therefore case-sensitive if carrier market

In Valeo, explained this discrepancy between the level of saturation of the plants and the actual demand by the rapid growth of the market. "Chinese customers are very quickly." "This is why it is better to be in slight excess capacity in China to be sure to respond to the request," explains Luc Blériot, Director of operations.

Difficult to predict demand

HSBC analysts noted in a note the extent to which it is difficult to forecast demand: on the one hand, the consumer will remain sustained with the adjustment of wages; on the other, the removal of subsidies and a monetary policy more restrictive may weigh on demand. Another question: what will be the rate of equipment of the Chinese in a few years If it is only about 40 cars per 1,000 inhabitants today, we doubt any and it reaches European levels or Americans, between 500 and 700 depending on the country. From HSBC, can build on a level of 95 per 1,000 by 2015.

To avoid losing market without sufficient capacity, manufacturers share as suppliers must therefore gradually climb power as illustrated by Valeo in Nanjing plant, which manufactures clutches and torque converters. Built three years ago, this site has free space to be able to add new furnaces for heat treatment. Outside, there is still land for instead m2de building to add 3 new lines from here to 2013, in addition to the two lines in service. If volumes reach 6 million units, Valeo plans to integrate the manufacture of clutch friction materials, currently purchased abroad on-site.

"In the past, we have more often seen undercapacity of overcapacity problems", said his side Lin Huaibin, senior analyst at Global Insight. According to him, demand will greatly advance under the effect of the development of automotive credit, which represents only 10 of purchases today in China, compared to 85 in the United States. Lin Huaibin believes that the analyses are based on GDP per capita of only 3.670 dollars per head are false, because the calculation of the GDP largely underestimated the underground economy. In the end, the Chinese have more financial means believed to afford their first car.