China's automobile milestone in 2013: production may surpass Europe for the first time

China's auto production will exceed that of Europe for the first time this year. This will be a milestone in the rise of the Chinese auto industry and highlight the plight of the European auto industry, which will face a challenging year.

According to the predictions made by the five forecasting agencies for the Financial Times, China will produce 19.6 million cars and other light vehicles such as small trucks this year, while production in Europe will be 18.3 million.

Considering that European predictions include not only the European Union (EU), but also countries such as Russia and Turkey, the rise of China is even more striking. According to estimates from the automotive industry, last year, the output of European cars and related vehicles was 18.9 million, significantly ahead of China's 17.8 million.

These forecasts are based on data from Global Vision (IHS), LMC Auto and PricewaterhouseCoopers (PwC), as well as investment banks UBS and Credit Suisse. They predict that the global auto industry will only recover slightly this year. Global auto production is expected to increase moderately by 2.2% in 2013, while it will grow by 4.9% in 2012.

Given that global auto sales are around US $ 1.3 trillion per year, the automotive industry is one of the best leading indicators of global economic conditions.

According to these data, Europe's car production will account for slightly more than one-fifth of the global share this year, far below the 35% in 2001. In 1970, almost every second car produced in the world had a factory from Europe.

China's auto production this year may be 10 times higher than in 2000. At that time, China's market share in the global auto manufacturing industry was only 3.5%, and this year it may reach 23.8%.

Scott Corwin, an automotive expert at consulting firm Booz &; Co, said that although both the US and China ’s auto production and demand growth forecasts are relatively strong, “these markets will not be very large Push (the whole world) forward. "

Cowen also warned that although the rising momentum of the Chinese auto industry will continue in recent years, due to the fierce competition and the fact that the Chinese market is composed of a large number of small cars (its manufacturers have a very low profit margin), many businesses operating in China Automakers will be "difficult to make big money."

The expectation of a decline in European car output is a response to the sharp decline in car sales across the European continent since the 2008/2009 financial crisis. These problems have caused serious difficulties for many large automakers, especially the French PSA Peugeot Citroen ), The company is laying off nearly 10,000 people, and is seeking a 7 billion euro bailout plan for its financing sector from the French government.