Analysis of Internal-combustion Engine Industry Development in China
2009-05-18 Source：english.chinabuses.com
Summarize：Average annual compound growth rate of Internal-combustion engine industry is 13.5% for nearly 10 years, and it’s higher than the GDP growth rate over the same period. Auto Internal-combustion e ...
Average annual compound growth rate of Internal-combustion engine industry is 13.5% for nearly 10 years, and it’s higher than the GDP growth rate over the same period. Auto Internal-combustion engine sales accounts for 15.2% of the internal-combustion engine industry, when calculated by the power it’s up to 75%, it’s the most important sub-sector of the internal-combustion engine industry.
Currently, the internal-combustion engines are mainly sold domestically, according to related data, internal-combustion engines exported 430,000 units in 2008, only accounted for 5% of total exports. Judging from the past 10 years, with the improvement of domestic auto engine technology, domestic auto production have always been keeping a high self-sufficiency rate, it’s over 90%, only imports some of high-end engines for matching high-end autos produced by joint venture companies.
After several years of rapid development, China's total auto sales have been the second largest in the world, with the United States as the largest one. We believe that China's auto industry is still in its infancy stage, domestic demands will keep rapid growth for a long time, and take the pulling power of export markets into account, in the next 10 years ,the total domestic and export auto sales should keep 15-20% of the annual compound growth rate . Auto internal- combustion engines average annual compound growth rate should be the same as auto sales growth, around 15% -20%.
Judging from industry structure of internal-combustion engines domestically, independent engine companies in the field of diesel engine have a higher market share, up to 57.4%, of which, Yuchai power up to 23.0%. Independent engine companies in the field of gasoline engine have relatively low market share, only 13.8%, of which, Dongan Power and other related companies have market share of 8.7%. The domestic gasoline and diesel engines partly monopolize the market. Compared with independent engine companies in international auto Internal-combustion engines, it’s not hard to find that domestic diesel and gasoline engine market share is relatively higher, especially in the field of gasoline engine.
There are only quite a few International independent gasoline engines companies, large-scale passenger auto groups all have gasoline engine companies. We think that it’s because of passenger auto groups have large scale production capability, have self-employed engine business, on one hand, it will help improve the integration and development of new autos, on the other hand, it’s good for profit rising. The domestic passenger auto is still in early stages of development, there are some smaller CKD companies, it usually takes outsourced mode for Research & Development of larger engines, and therefore, there is living space for independent gasoline companies. We predict it will be the same in the future. The market share of independent engine companies in the field of gasoline engine will continuously reduce.
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