Cars sector set for shakeout
30 November 2005
Overcapacity in China's passenger car industry will soon exceed 50% as manufacturers rush to build new factories far in excess of demand, an economist at the State Council Research and Development Center told the South China Morning Post. In the first nine months of this year, the auto industry's utilization rate was 55%. Capacity is eight million units, with a further 2.2 million being built and plans for another 10 million. "The rapid but abnormal growth in 2003 misled investors and companies into believing that this was normal," said Chen Qingtai.
