Any M&A cycle inside the Chinese automotive industry would be a welcome source of capacity reduction, but we see it as unlikely that new efficiencies through consolidation will be sufficient to offset the tide of diminished expectations as monthly sales figures comp to impossibly high 2009 levels. As such, the DBN 600 Automotive Sub Index current level appears likely to be unsustainable in the intermediate term after a 150% increase YTD and we are inclined to shift the group out of our industry focus group for Q4. Land of Opportunity The strategies adopted by US and European JVs pursuing market share in the Chinese market have produced predictably mixed results to date, and recent developments suggest that some (primarily the US firms) will continue to flounder. With under 3% of the total market Ford is playing catch up with the announcement of a third plant with partner Chonqing Changan to be on line by 2012 which will lift total annual capacity on the mainland to 600,000 units.