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China wants its own Big Three auto makers (BYDDY, TM, VLKAY)

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With over 70 automakers in the country, the Government of China wants it own "Big Three" to better compete, both at home and abroad, with foreign manufacturers such as Volkswagen ( VLKAY , quote ) and Toyota ( TM , quote ).

To start reducing down to its own Ford ( F , quote ) and General Motors ( GM , quote ) -- much less Chrysler, the third member of the traditional trio -- Beijing is aiming to have ten or few automakers by 2015, according to the article, "In China, Culling the Carmaker Herd," in Bloomberg Businessweek .

Initially, the goal was to have less than 10 producers accounting for 90% of the market in China by 2011. But as it is, the top 15 producers, both foreign and domestic, now have 89% of this once-fragmented market.

Over the last decade, the number of car makers in China has fallen from 103 in 2001 to the current 70. Still, about 60% of the Chinese vehicle market is controlled by foreign brands, up from 55% a year ago.

By consolidating the number of companies making automobiles, Beijing will be able to more effectively and efficiently foster growth in the industry as the utilization of resources will be much more focused.

Ten automakers in China have not sold a single vehicle this year.

This consolidation initiative will eventually allow a prospective Big Three of Chinese automakers -- maybe Changan, BYD ( BYDDY , quote ), and Guangzhou Automobile -- to better compete with foreign brands like Volkswagen and General Motors.

The automobile market in China has increased more than eight times over the last decade to 18 million vehicles sold annually. This is projected to increase to 30 million sales by 2020.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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