Mark Mobius Big Fan Of Chinese Automakers
While the global auto industry has seen better days, there’s one area of the world where its prospects have never been so bright. Morris Beschloss, writing for the Palm Springs, California-based publication The Desert Sun, talked yesterday about China’s emergence as the global leader in car production and domestic sales. And one legendary investor in particular has taken note of this development. Beschloss wrote:
China will produce 10.8 million cars and light trucks this year, while the U.S. will turn out 9.5 million at best. And this does not include China’s Sichuan Tengzhong Heavy Industry Machinery purchase of Hummer from GMC this month.
To underscore this new manufacturing dominance, Chinese plants shipped more autos than any other country in the world during this year’s first four months.
To prove that this spectacular performance is no pig in a poke, Chinese car sales in April grew to a 35 percent year-over-year sales increase as the U.S. plunged 40 percent. Currently, Chinese factories can’t produce enough cars to meet demand. While inventories in the U.S. and Western Europe are at record highs, Chinese inventories are practically bare.
With China’s $600 billion stimulus plan accelerating domestic consumer demand, new car buyers in China face increasingly longer waiting periods…
To punctuate this success story, Franklin Templeton’s Mark Mobius, who manages more than $25 billion in emerging market funds, is a big fan of Chinese car companies, and includes them in his emerging markets’ core holdings.
Mobius explains “that the increasing affluence of Chinese buyers is increasingly manifesting itself in buying new houses, cars and appliances, which translates into the massive expansion of China’s manufacturers for domestic consumption.”
Source:
“Beijing becoming global leader in auto production”
Morris Beschloss
The Desert Sun, June 14, 2009
