BorgWarner Inc. CEO Timothy Manganello said during the Reuters Global Autos Summit that production capacity in China's auto industry could grow to 40 million units by 2020.
However, a surge beyond that level might risk drowning the Chinese market and others with excess supply.
BorgWarner estimates that Chinese auto production could grow to 30 million units by 2020. In 2009, vehicle sales in China surged to a record 13.6 million units and, for the first time, the Chinese market surpassed the U.S. market.
Manganello adds that some forecasters see even higher sales of 40 million by 2020. However, there may not be enough Chinese buyers to snap up cars to support that level of production.
This could result in Chinese automakers trying to sell their excess vehicles in North America, Europe and elsewhere in Asia, a move that would pressure pricing in such markets and expose areas of costly excess capacity for competitors.
Manganello also adds that increasing capacity to build 40 million cars may also backfire on Chinese automakers, leaving them with too much supply and few buyers. [via autonews - sub. required]