China’s once red-hot automotive market appears to be cooling down along with the rest of the Asian nation’s economy – and that could create some serious headaches for manufacturers who have committed billions of dollars in investments for new products and the plants needed to build them.
The slowdown raises the possibility that after long focusing on the booming domestic market, automakers might now need to shift focus to exporting cars to Europe and the U.S. to keep their factories running at full speed. Some observers are speculating that might be one of the reasons why investment guru Warren Buffett has purchased one of the largest auto dealer networks in the U.S.
The slowdown in China nonetheless needs to be put into perspective. While the pace of growth has slowed substantially from the days when sales soared by as much as 100% annually, China’s car market is still the world’s largest and is growing at roughly the same rate as the U.S. automotive recovery. (more…)