Foreign automakers continue investing in China despite slow growth

Foreign automakers are investing more money into factories in China irrespective of fact that the biggest economic slowdown affected sales growth adversely. It seems that Volkswagen AG and General Motors will not cut their planned investments, whereas Toyota Motor and Ford Motor Co. are also working in this direction.

This is being done by the companies instead of the economic slowdown, which affected the car market in January-March. During that time sales increased only 3.9%, compared to 9.2% a year ago and below the 7% growth estimated by the China Association of Automobile Manufacturers (CAAM) for this year.

On Monday, Carlos Ghosn, CEO of both Nissan Motor and Renault, said at the Shanghai autoshow, "It's still one of the markets with the highest growth in the world so we're not disappointed in this. We are investing in China and we are going to continue investing in China".

At this week's Shanghai show, many foreign automakers will be revealing new products for China, which include Ford's redesigned Taurus sedan. The companies are not worried over the first quarter slowdown. However, according to James Chao, Asia chief of IHS Automotive, if the effects from the broader economic slowdown emerge during the rest of the year, global automakers might have to rethink over their plans of expansion in China.

Some foreign automakers are still doing better in the market such as Ford, which posted 9% sales growth in the first quarter.

According to Ford's executive chairman Bill Ford, they are concerned over meeting the demand and they consider reality, which indicates that they need to decrease their production.