Car Sales in China Rocketing Dramatically

Financial Times Deutschland, Hamburg

Wednesday 09 December 2009

(Translation from German)

The number of new vehicles will soon outstrip the USA

The figure for car sales in China for November was up 98 per cent on the previous year. As reported yesterday by the Chinese Association of Automotive Manufacturers (CAAM), the previous month saw sales of 1.04 million cars, off-road vehicles and minivans. Total vehicle sales for the country, including trucks and coaches, rose by 96 per cent in November to 1.34 million. The reasons behind the strongest increase in sales for at least five years were the economic programmes being pursued by the Chinese government, which have deliberately increased demand for cars.

The claim is that China is therefore set to take over from the USA, even during this year, as the world’s biggest market for cars. For the past five months already, car sales in China have been climbing by over 50 per cent, while sales in the US, Japan and Europe have slumped. In India too, the increase in car sales in the past month is at a level not seen in the previous five years.

“For most car manufacturers worldwide, China is where business is going best,” said Bill Russo from the consultancy company Booz & Company. “The challenge that lies ahead for them is recognising how the trends can be exploited.”

One factor in stimulating growth in China is the 4000 billion Yuan (€ 397 billion) in government spending this year. The country is the world’s third-largest economy. And the economic measures aimed at increasing car sales include a reduction in VAT from ten to five per cent. Moreover, subsidies totalling 10 billion Yuan are also intended to assist with sales.

Now economic growth is set to ensure a further increase in sales. Last month the OECD (Organisation for Economic Co-operation and Development) raised its prediction on economic growth in China for this year from 7.7 per cent to 8.3 per cent. For 2010, the OECD is forecasting 10.2 per cent growth in the Chinese economy.

Calculations by the financial news agency Bloomberg, based on the figures quoted by CAAM, indicate that the two biggest local companies in which General Motors has a stake increased their sales last month by 105 per cent. Beijing Hyundai Motor, a partnership between Beijing Automotive Industry and the South Korean car manufacturer Hyundai, doubled the number of cars sold, to 55,576. The two companies in which VW has a stake increased sales by 58 per cent, to 130,525 vehicles.


No comments:

Post a Comment