Saturday, September 7, 2013

Car profits, more than half from China rise

Car profits, more than half from China rise

Want global automakers, in the middle of one of its best years ever, is the rest of this decade rake in even greater profits, according to a new report. The challenge arises where revenues returned before the recession stand production in North America are specially designed for the big three (GM, Ford, Chrysler),.

"North America and China are the largest profit pool," said Hans-Werner Kaas from McKinsey & co. "China, in particular the premium market see the greatest growth."

McKinsey notes until 2020 more than half of the Chinese global car will grow profits by 50 per cent. The report projects emerging as the area where auto manufacturer primed to increase yields.

With U.S. auto sales surging this summer, grows, to build pressure on the automaker to add capacity, more cars and trucks. At the end of the year, half will be will be sold in the United States that operated North American by the big 3 models, which run three layers according to IHS automotive.

So when will the big 3 and add other car manufacturers, more assembly lines and plants?

"I'm sure that these discussions are already underway," said Kaas. "But the domestic automakers will expand carefully over the capacity."

Auto executives in Detroit and elsewhere in the near future have to make a decision, he added. It takes 18 to 24 months to bring a plant online. If sales at their current grow, North American car production are as far as possible extended period of a few years.

"Domestic automakers will hit the limits of capacity in North America by 2015, so is it no doubt executives have to start talking about the expansion of," Kaas said.

Volkswagen is building Audi models for the United States will provide a final assembly plant in Mexico.

China and emerging markets

McKinsey projects that emerging markets generated a larger share of the global auto sales in the next seven years. Such markets, including China, Russia and India, are responsible for half of all cars and trucks that are sold each year. The consulting firm expects that this share will rise to 60 percent by 2020.

The growth, particularly in China, that's why Kaas says that car manufacturers must still move more production to this country and emerging markets.

"Urbanization and industrialization drive growth in China and that will continue for many years," he said

General Motors, Ford, and Volkswagen all races to new plants, and run in China are General.

On Friday, standard and Poors raised Ford Credit rating to investment grade and picked up General Motors Outlook positive because of the success, which have both companies in China partly.

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