REUTERS: Car production in China will expand at nearly double this year’s rate in 2016, but the industry’s capacity glut will worsen as idle production rises, consultancy PwC said in a report.
Production of light vehicles in the world’s largest auto market is set to grow 8.2 per cent year-on-year in 2016 to 25 million units, the report said. However, idle capacity will increase by 1.5 million cars, lowering overall capacity utilization to 66 per cent.
China has vowed to tackle industrial inefficiencies with Premier Li Keqiang saying last week that overcapacity firms would go “under the knife.” Analysts say the autos industry is already overcapacity with domestic automakers worse off than their foreign rivals.
Production of light vehicles in the world’s largest auto market is set to grow 8.2 percent year-on-year in 2016 to 25 million units
Despite the end of hyper growth for car sales, China’s auto industry remains the most attractive globally even with moderate growth, according to the PwC report, which was released to Chinese media on Thursday.
The national automakers association chief said Thursday sales are likely to grow around 3 per cent in 2015 and 5-7 per cent next year.