China’s manufacturing PMI has grown 3.1 points from December 2022 to January 2023, reaching 50.1 points and spreading optimism among an industry eager to return to growth mode. That, in conjunction with the announcement of large infrastructure projects made after the Chinese Lunar New Year, indicates that the industry will finally enjoy better times, and a fair wind is blowing for a fast recovery.
However, challenges remain for the Chinese market. The Chinese Association for Automobile Manufacturers (CAAM) reported 1.594 million units produced and 1.649 million units sold in January 2023, down 34.3% and 35%, respectively, year-over-year. For new EVs, production and sales recorded 425,000 units and 408,000 units, down 6.9% and 6.3%, respectively. Indications are that the demand will continuously improve from February on.
Some newly released projects and investments are listed below:
Bosch Group announced a $1 billion investment to build a new auto parts plant in Suzhou, Jiangsu, to expand production capacity. An R&D center is also part of the plans to be completed by mid-2024.
BYD's northern headquarters plant in Xi'an, Shaanxi, will receive a $2.14 billion investment to expand the production capacity of electric assemblies, motor manufacturing, sheet metal parts, gears, electric controls, electric power supplies, braking systems, and other new EV core parts.
ZF Group will invest in a new auto electronics factory in Guangzhou, Guangdong, improving the production capacity of autonomous-driving components, cameras, sensors, braking systems, electronic systems, and other parts. The start of production of this new plant is 2023, while investments are worth $100 million.
Panasonic announced investments of $384.6 million in Hangzhou, Zhejiang, to build a new rice cooker facility to expand capacity and improve the supply chain. This plant should be fully operational by 2024.
Geely Automobile Group will invest $1.43 billion in Wuxi, Jiangsu, in a new facility to build and commercialize high-performance electric drive systems.
For more information, please contact Fred Qian at fredqian@AMTchina.org.