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November 18, 2005

JAPAN: Six Japanese car makers plan China investments of over JPY220bn

Six Japanese car makers, including smaller players such as Suzuki and Mazda, plan combined investments in China of more than JPY220bn over the next five years to tap the world's third-highest growth market, the Nihon Keizai Shimbun reported on Friday, according to Kyodo News.

Six Japanese car makers, including smaller players such as Suzuki and Mazda, plan combined investments in China of more than JPY220bn over the next five years to tap the world’s third-highest growth market, the Nihon Keizai Shimbun reported on Friday, according to Kyodo News.

Suzuki reportedly intends to spend approximately JPY30bn to expand both its production capacity and sales network, the report said. Mazda will start local manufacturing and invest JPY45bn to boost its dealership network by 150%, while Mitsubishi Motors intends to triple its number of sales outlets, the report said.

Competition in China is bound to heat up with the onslaught of a ”second wave” of aggressive spending plans by Japanese car makers, following the investment binge triggered by the three biggest players – Toyota, Honda and Nissan Motor, the report said.

The string of investments will double annual Chinese output capacity from 200,000 to 400,000 vehicles and expand the sales network there from about 600 to 700-800 dealerships, the report said, adding that the Chinese car market expanded from 1.83m units in 1999 to 5.07m in 2004.

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