Industry Trend Analysis - 'Trade War' Overlooks Chinese Autos Investment - MAR 2017

BMI View: Any punitive measures levied against the Chinese autos sector by the US will hit the supplier segment hardest given the more marked unbalanced trade between the two in this area. It will also lead to more investment in US facilities by Chinese companies.

Talk of an escalating trade war between the US and China, based on Donald Trump's pledge to address the US' trade relationship with China, overlooks the growing trend for Chinese companies to invest in the US autos sector, despite having little vehicle sales presence. Our investment round-ups for the autos sector show that since the beginning of 2015, Chinese autos companies have invested around USD630mn in manufacturing in the US, while it was reported in January that an unnamed Chinese carmaker has also invested USD27mn in autonomous car research at the University of Michigan.

Yangfeng Automotive's announcement in early January that it will invest USD8.45mn in a new headquarters and technical centre in Novi, Michigan is just the latest in a growing trend for Chinese companies to establish a footprint in the market. In fact, this is the second Yangfeng investment we have tracked, following its USD55mn investment into a new manufacturing plant for vehicle interiors in Tennessee in July 2015 ( see ' Autos Investment Round-Up: Tennessee Diversification A Key Trend ' , July 30 2015).

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