China Set To Become Top Automaker

China, which last year surpassed the United States to become the second largest auto-making country, is poised this year to topple Japan as the world's top car producer, a market research firm said Thursday.

Chine is expected to build 8.7 million autos this year, compared to 7.6 million for Japan, iSuppli said. Last year, China automakers produced 9.3 million cars. That's 600,000 more autos than U.S. manufacturers. Most of Chinese cars are built for its domestic market.

"China's rise to the No. 2 position in global car manufacturing in 2008 marks a major milestone in China's economic ascendancy and the United States' industrial decline," iSuppli analyst Egil Juliussen said in a statement.

During the last five years, China has doubled automobile production, while U.S. manufacturing had fallen nearly 50%. Chinese automakers have benefited from the country's booming economy and the dramatic rise in disposable income of its consumers.

On the other hand, U.S. carmakers have suffered from increasing imports from Canada and Mexico under the North American Free Trade Agreement, as well as from imports from Europe and Asia, iSuppli said. Also, U.S. automakers have outsourced a major portion of their car manufacturing for the domestic market to Canada and Mexico. In 2003, U.S. carmakers built nearly three autos for every one produced in China.