In China, carmakers are pushing forward their capacity expansion projects
- Despite operating ratio declining for the past five years, carmakers are pushing forward their capacity expansion projects. In particular, Chinese carmakers are planning to increase capacity by 12.2 million units to 34.93 million by 2020, of which the top three, namely BAIC, Changan and SAIC, are planning to boost capacity by 2.59 million, 1.12 million and 1.1 million units respectively. Europeans are planning to raise capacity by 4.27 million units to 9.52 million units by 2020, of which VW's capacity expansion goal is 2.4 million units. As for Japanese carmakers capacity is intended to be increased 2.07 million units to 6.24 million units by 2020, of which combined capacity expansion volume of Nissan, Toyota and Honda is 1.3 million units.
- Meanwhile, there has been rising concern about overcapacity in recent years, prompting carmakers to take countermeasures. Dongfeng Motor has postponed new capacity expansion projects since 2013 and transferred production of Dongfeng Peugeot Citroen's Peugeot 2008 to Dongfeng Motor passenger car Company in an effort to improve operating ratio of the facility. Meanwhile, Changan Automobile transferred production of the new Benni to Changan Suzuki in 2015, and production of the Eado EV is planned to be manufactured by Changan PSA.
- In the medium to long term, overcapacity is expected to worsen, making it necessary to carry out further consolidation of the automotive industry. The first sign of this trend was the acquisition of Hafei Motor's Harbin plant by Ford in March 2015 with an aim to set up Changan Ford's first factory in northeast China.
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