On the Road to Profits in China's Auto Sector

by George Leong

 Ever wonder how many cars are on the road in China? The estimates vary, ranging from 25 million to over 100 million. It seems no one really knows.

The Chinese auto sector had been sizzling, even overtaking the U.S. as the biggest car market in the world. With a middle class of over 300 million in a rapidly expanding Chinese economy, buying a car is paramount to the Chinese. However, the growth has been on the decline this year, as the government ended its tax incentives and jacked up taxes in order to streamline the number of new cars hitting the already clogged Chinese roads.

The Chinese car market grew 32% in 2010, but is estimated to falter to a mere three to five percent this year, according to the State Information Center.

So, while the Chinese auto sector will stall, it is clearly not dead. The demand for cars continues to be extremely high, as income levels continue to rise.

The key in China will be the rapid growth of the country's middle class. Credit Suisse predicted that the household wealth in China will double to $35.0 trillion by around 2015 based on achieving sustainable GDP growth at or near the current growth rate.

I have been a big supporter of the Chinese auto sector. Yes, the sector has slowed, but the massive potential is just too great to ignore. If you are patient, you need to have some capital in some of the Chinese auto-parts stocks or a play via U.S. automakers.

A lower-risk play on China's auto sector is General Motors Company (NYSE/GM). (Note that this is not a recommendation to buy the stock, but just an example to give you an idea of your options in this area.)

If you want to play via an U.S. automaker for less risk, General Motors is the top auto seller in China. GM and its Chinese partners (SAIC Motor and FAW Group) sold 2.35 million vehicles in 2010, well above the company's U.S. sales. The automaker is focusing its growth in China, as it feels the steady rise in the middle class will drive the demand for cars. GM will invest a minimum of $5.0 billion in China to try to reach a sales target of five million vehicles by 2015.

There is clearly some slowing in the Chinese auto market, but I view dips as an opportunity to buy for those with a longer-term view.

Consider that only about 41 in 1,000 Chinese own vehicles, according to some industry pundits. There is clearly ample room for growth, especially as the income levels continue to rise. This fact will drive vehicle sales going forward to the point where China will likely remain the top auto market in the world.

There are numerous ways to play the Chinese auto sector. You can buy an auto company on an American stock market with exposure to China, such as the major global automakers, as I discussed. Alternatively, you can buy Chinese auto-parts makers. Some interesting Chinese auto plays include China Automotive Systems, Inc. (NASDAQ/CAAS), Wonder Auto Technology, Inc. (NASDAQ/WATG), and SORL Auto Parts, Inc. (NASDAQ/SORL). Again, these are examples, not buy recommendations.



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Article Source: http://www.articlesphere.com/Article/On-the-Road-to-Profits-in-China-s-Auto-Sector/267777

Auto Dealer License

 by Craig Harris

 Anyone in the automotive business would require an auto dealer license to deal with the sale and purchase of autos whether full time or part time. In fact such license is mandatory under the laws of the land irrespective of the types of auto one is dealing with. Even for the part time dealing with the autos one would require such license.

Obtaining License is Not Difficult

There is however no reason to be worried as obtaining a fresh auto dealer license or adding one to the existing automotive business is fairly easy. Only thing that is required is the aspirant has to follow a few steps meticulously to get license for such dealership. First of all, one has to contact the local motor vehicles department or the D.M.V. Best part of it is that opportunities are now available to apply online for such dealer licenses. Conversely one can also directly approach the office or call upon them.

Learning About the Law of the Land

Legal requirements vary from state to state in respect to the grant of such auto dealer license. It is therefore call of prudence to check up what the specific requirements in one's state is. Of course the D.M.V would explain the detailed requirements for obtaining a auto dealer license and one has to take an examination for the purpose. While the examination in each state is a little different, the examination on the whole is not difficult. Wait a little bit for going through the examination and study well and you will be through with it. Free books are offered by the D.M.V to assist the auto dealer license to study.

Getting the Approval of DMV Inspector

Once the examination is passed the next step would be getting the approval of the D.M.V inspector attached to the particular location. One of the important things is to know exactly how many autos one can sell with the license and how many they can have in stock. It is not exactly necessary having a property or commercial premise at one's disposal for the purpose of auto dealership. One could simply carry out the auto dealership from his or her own home. Only thing that will matter is how many autos one can stock.

Important Aspects

Thus one can see that the most important aspects of successfully getting a auto dealer's license involve a few crucial factors. First and foremost of them is learning about the legal aspects of the dealership. Appreciating properly the law of the land is important as every state has some different laws relating to grant of dealership license. Dedication, determination, and disciplined approach are also important as it will help one to get successful in getting the auto dealership license.

Used Auto Dealer License

It is not only the new autos that would be dealt by a dealer but the dealership could also be on the used autos. For instance a dealer in Arkansas will require a valid auto dealership license if he intends to sell more than five autos. Laws vary from state to state and one should fulfill the required criteria to get the auto dealer license even for dealing with used autos.



Dealerauctionaccess helps aspirants across the country trying to get an auto dealers license by providing them all the information relating to obtaining such license. In addition the site also provides model questions, step by step guide, and tutorials besides a comprehensive database of legal provisions followed in different states on grant of such dealers license.

Article Source: http://www.articlesphere.com/Article/Auto-Dealer-License/221384