Value Investments can be hard to find. The companies that I will profile are all from big emerging economies such as China, Brazil, Indonesia, and Malaysia (to name a few). They are all real companies with consistent and growing revenue streams that have had valid audits. Let's find them together!

Thursday, May 19, 2011

Chinese Auto Industry

Something I have been looking into recently is the Chinese Auto Industry.  I was led to this based on a few of the new companies that I have been looking over and trying to figure out the various avenues that have spurred their growth.  The car industry in China is growing at a very rapid rate and they are consistently looking to expand.  Currently there are $1.9 million cars sold in China each month.  That compares to $1.2 million cars per month in the US.  In 1990 there were 5.6 million cars.  In 2010 there were an estimated 91 million vehicles.

In Q1 '11, a report by the Chinese Association of Automobile Man
ufacturers finalized their sales at an increase of 13.81%.    If this trend keeps up, they will crush the U.S. in auto sales this year by almost 40% or more.. 

I followed this trail some more and found China has made efforts to purchase Saab and is looking to buy more in the European auto industry, and has manufacturing plants opening in its country for Ford   (transmission building plant).  Suppliers are looking at how to expand into the local auto manufacturing as well since they own about 40% of the market compared to international sales.

Geely Automakers has already bought out Volvo.  While this happened in '10, it will be something to watch moving forward as they will have a full year with Volvo in '11.

One thing that jumps out to me is the thought that these automakers may get left out of the Chinese markets; whereas they are going to be bought by Chinese companies and will then have all the access they need.
A couple others: BYD (Warren Buffet's choice), DongFeng Motor Group, and Brilliance Automotive

Note: these trade in Hong Kong

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