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Saturation of Chinese market now a threat to Saab’s future

Friday, 23 September 2011
When China emerged as the growing place where auto makers could make wealth, as the markes in the developed world gradually became saturated, those companies that went there initially had little to deal with.

Now as Saab struggled to seek where to breath a new life and air, and looking at China as the place to propel the company back to life, it turns out that the Chinese Market is getting saturated with car makers. As such it might be hard for Saab to get a place in the market. This is not good news for Saab.

This comes from news in the Swedish media on Friday that the Chinese authorities are getting cautious about car projects in which Chinese companies associated with foreign companies to sell their products in China. This makes Saab stands out as a looser if the government goes ahead and tighten the sector from the entry of foreign companies.

Referring to the news magazine, Automotive News China, the magazine's editorial director Yang Jian warned in a column that the door to the lucrative car market in China is beginning to close.

Concerned about the risk of overcapacity in the domestic car market is one of the factors making China's central authorities to now make it more difficult for companies to merge with foreign manufacturers.

The losers in the Government's new vision is smaller manufacturers in China, which wants to grow and to compete with the larger, state-owned companies, Yang Jian is said to have believed.

There things are not looking good for Saab though, he believes. It hold that the Chinese authorities have proposed new, stricter requirements for companies wishing to pursue projects with foreign companies in China. The opportunity should be reserved for Chinese companies that have reached a certain size and have developed their production facilities and operating conditions. Large Chinese manufacturers will also have more opportunities to develop their own projects.

It does not speak for the relatively smaller, private company such as Youngman, who wants to enter into co-operation with Saab, believes Yang Jian. Pang Da, which does not produce any cars at all, may also have problems.
By Scancomark.se Team

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