Shanghai: Automotive city

The city government has ambitious plans for the automobile industry in Shanghai. The entire precinct of Anjing, in which the Formula One racetrack can be found, has been transformed into an automotive mecca, where all operations of the car industry should be concentrated. Shanghai Volkswagen has a branch there, serving as basis for this ambitious project. Over 180 national and international companies have already opened offices in Shanghai.

The automotive industry's future in China

The China boom and growth in the car industry grows unabated, although it is expected that in fewer than five years an oversupply of over two million vehicles will arise n the Chinese market. Moreover, there is concern that foreign companies in the automotive service sector will get a raw deal since the Chinese industry attempts to forego non-domestic know-how and money. That they will succeed in this is beyond doubt, thanks to foreign assistance: Chinese personnel are trained by foreign experts in joint ventures, and then they migrate into the delivery or service sectors. Growth markets in auto financing and insurance, too, remain firmly in Chinese hands.

While in Chinese metropolises an avalanche of steel rolls-nowhere do pedestrians walk closer to moving cars than in Shanghai-the market in the western provinces lies fallow. In the great cities, permits are being limited in order to deal with the situation, whereas the government is trying to boost demand in the western provinces via ambitious infrastructure enhancement projects.