China's Auto Engine Production to Reach 5.35 Million Units in 2006

Strategic Insights -

China's auto engine production is expected to hit 5.35 million units in 2006, a significant increase from 1.56 million units produced in 1998. The growth of auto engine market is mainly attributed to the rapid production of gasoline engines. The production and marketing of auto engines in the country has remained balanced in recent years, with a production-marketing ratio of 100.31% in 2005. Experts are calling for the wider use of diesel engines to alleviate the bottleneck in energy supply and demand caused by accelerating fuel consumption.

Key Takeaways:

  • China's auto engine production is projected to reach 5.35 million units in 2006, a 57.14% increase from 4.71 million units produced in 2005.
  • Gasoline engines account for 73.02% (3.43 million units) of the total engine production in 2005, while diesel engines account for 26.98% (1.27 million units).
  • The top three diesel engine makers in China, Yuchai, Dongfeng, and Yunnei, together contributed 54.9% to China's total diesel engine output in 2005.
  • The Guangxi Yuchai Group is the largest diesel engine output in China and the second largest in the world.
  • Domestic engine makers' profitability is shrinking, with an average profitability of 21% lower in November 2005 compared to the previous year.
  • Profitability for the internal-combustion sector is expected to worsen in 2006 due to rising raw material costs and cheaper car prices.

Statistics:

  • China's auto engine production in 2005: 4.71 million units
  • Production growth rate from 1998 to 2005: 201.92%
  • Spread between production and marketing ratio in 2005: 100.31%
  • Number of gasoline engines produced in 2005: 3.43 million units
  • Number of diesel engines produced in 2005: 1.27 million units
  • Domestic engine makers' profitability in November 2005: -21% compared to the previous year
  • Raw material costs in 2006: projected to rise
  • Car prices in 2006: expected to decrease

Sources:

  • Beijing-based China Electronics News
  • China Internal-Combustion Industry Association
  • Asia Pulse (April 6, 2006)
  • XIC (06-04, 1425)