| China entered the business of manufacturing automobiles at a much later date than Korea and Japan, but there is no question now that China has the potential to dominate the industry. With the rapid growth of the Chinese economy driving the demand for cars and with a government that does what it can to encourage the domestic production of cars, the potential is there for yet another dramatic change in the world manufacturing structure.Based on statistics and analysis of China Association of Automobile Manufacturers (CAAM), China automobile sales were2,035,100units in March, increase50.22%compared with last month, and increase10.69%compared with the same period of last year. Among main automobile categories, passenger car sales was1,585,500units, higher than the previous42.60%, and up13.25percent year on year; the sales of commercial vehicle was up to449,600units, higher than the previous85.15percent, and up to2.51%year per year. From January to March, Chinese auto sales exceeded5,424,500units, increase13.18percent compared with the same period of last year. Passenger car sales increase17.21percent year on year to about4,423,100units; commercial vehicle sales exceeded1,001,400units, a decrease of1.72percent from a year earlier.Therefore, most sales were made to emerging economies such as Algeria, Brazil, Chile. Egypt, Iraq. Iran, Russia, Saudi Arabia,South Africa, or Syria where a Chinese-made automobile such as a Geely, Great Wall, or Chery sells for about half of what a comparable model manufactured by a multinational brand such as Toyota does. Among the top automobiles were local brands of (including BYD. Lifan. Chang’an (Chana), Geely, Chery, Hafei, Jianghuai (JAC),Great Wall and Roewe. SAIC,DFM, FAW, BAIC, Brilliance, Guangzhou), and the rest were produced by joint ventures with foreign cars like Volkswagen, General Motors, Hyundai. Nissan, Honda, Toyota, Audi, BMW, Suzuki, Mitsubishi, etc. The reason behind this growth is the spurring demand for automotive parts, services, and after-care products. China is presently capable of manufacturing a complete line of automobile products and large automotive enterprises. Even though the quality of Chinese cars is rapidly increasing but Chinese automotive industries face alot of challenges such as:lack of safety features, establishing an information feedback system with end-users in order to improve service; modernizing outdated sales systems; increasing the competitiveness of domestic auto parts, accessories and aftermarket kits; clamping down on counterfeit products, etc.With the gradually labor union pressure, salary increase, inflation rises, more environment regulations and control, increasing level of competition in the sector of automobile and more WTO regulations, Chinese cars are not no longer cheap, low quality and less safety features. Due to many other challenges facing manufacturing industries in China, and particularly automobile industries, relocation industries (complete or partial) is an alternative strategy for China to continue dominating the world automobiles market and keep its position as the world largest industry in the sector.In the other hand, Africa is also a favorable environment for china to relocate some of its industries as also mentioned by the Chinese minister of commerce at the last FOCAC meeting in July2012. Africa would also benefit from this issue to develop its economy longtime stagnated; it would also benefit from the transfer of technical knowhow. and the copy model of "flying geese" Trade pattern between China and Africa is growing faster, and China investment in Africa has also reached the highest level (20billion dollars in the coming three years) thereby allowing relocating some of their industries to the continent.Africa would benefit from China’s industrial relocation to its regions. Aside from creating jobs, transfer of skills, the industrial relocation would also extend the value chain of "Made in Africa" products and made these products more competitive in the global market thereby developing African economy following the example of the ’flyine geese" method. China would also benefit from the relocation of its industries to Africa by gaining low labor cost, low land cost, less environmental control, foreign direct investment opportunities, market demand and expansion, closeness to raw materials and shortening its supply chain, etc.. However, industrial relocation is not easy task. Before making the right move, an evaluation should be done whether moving will actually solve more problems than it creates.Therefore, the undertaken research will review the market regulatory and development of China Auto industry, Market analysis of China auto trade and China-Africa auto trade pattern; Relocation theory will be reviewed and practice to be applied with case study on African Counties. Rating Scale Techniques will be used for site selection along with sample matrix for evaluation. |
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