1.12.2012

US beats China in vehicle sales growth in 2011


The Global Post, January 13, 2012


US beats China in vehicle sales growth in 2011 | GlobalPost
http://www.globalpost.com/dispatch/news/regions/asia-pacific/china/120112/us-beats-china-vehicle-sales-growth-slowdown


China vehicle sales 2012 01 12

A crowd gathers to admire a gold-plated Infiniti luxury sports car on display outside a jewelry store in Nanjing in China’s Jiangsu province on March 31, 2011. (STR//AFP/Getty Images)



Growth in vehicle sales in China in 2011 lagged behind growth in US auto sales for the first time in at least 14 years, Bloomberg Businessweek reported.


Total vehicle sales, which include cars, trucks and buses, rose only 2.5 percent, according to data released by the China Association of Automobile Manufacturers today, Bloomberg Businessweek reported. Meanwhile, US vehicle sales increased 10 percent, the Associated Press reported.


Auto manufacturers still sold millions more vehicles in China than in the US, delivering 18.5 million vehicles to Chinese buyers in 2011 while US sales were 12.8 million, the AP reported. China became the biggest market in the world by number of new vehicles sold in 2009, according to the AP.


According to the Financial Times:
Most Chinese auto analysts believe the main reason for the slowdown was the withdrawal of tax incentives introduced by Beijing as part of a 2008 economic stimulus package, which helped boost total vehicle sales 46 per cent in 2009 and 32 per cent in 2010. Those incentives, for small engine cars and mini commercial vehicles, were withdrawn completely last year.
Higher interest rates and restrictions on new vehicles in Beijing also kept Chinese consumers from buying cars, Bloomberg Businessweek reported.


“This data was what we expected,” said Jia Xinguang, managing director of the China Automobile Dealers Association, told the AP.


While analysts don’t expect a return to the rapid growth of 2009 and 2010 this year, they said they expect the Chinese market to continue expanding, the Financial Times reported. Bill Russo, head of Synergistics auto consultancy in Beijing and former head of Chrysler in China, told the Financial Times that he expects vehicle sales in China to reach 20 million in 2012. “Continued growth of the urban middle class, along with continued investment in China’s transportation infrastructure, will continue to fuel demand growth for the foreseeable future,” he said.


The average estimate of 10 analysts surveyed by Bloomberg is that the US auto market will grow 5.6 percent this year to 13.5 million, Bloomberg Businessweek reported.

China car sales slow as US roars back

The Financial Times, January 12, 2012


Click here to read the article at FT.com



Chinese vehicle sales grew just 2.5 per cent last year, as the withdrawal of government stimulus measures tamed the exuberance of the world's largest auto market.

By contrast, the US last year bounced back to become the world's fastest-growing big car market, with car and light truck sales climbing about 10 per cent. But at an estimated 12.8m units last year, US light vehicle sales were still far below China's 18.5m.

A decade ago, the US auto market was at least 10 times the size of China's. “Any relative comparison of the growth rates between then and now is rather irrelevant,” said Bill Russo, head of Synergistics auto consultancy in Beijing and former head of Chrysler in China.

Some Chinese car buyers may have held off purchasing cars because of credit tightening or fears of inflation, but few analysts see the slowdown as a bellwether of slower Chinese economic growth.

Most Chinese auto analysts believe the main reason for the slowdown was the withdrawal of tax incentives introduced by Beijing as part of a 2008 economic stimulus package, which helped boost total vehicle sales 46 per cent in 2009 and 32 per cent in 2010.

Those incentives, for small engine cars and mini commercial vehicles, were withdrawn completely last year. Car sales – a category that does not include small commercial vehicles that were hit hard by the incentive cancellation – rose 5.2 per cent to 14.5m.

Foreign-invested carmakers did better. General Motors last week said China sales rose 8.3 per cent last year, well below 2010's 29 per cent but significantly above an expected 4 per cent rise in sales for the total Chinese market, while Ford reported a 7 per cent year-on-year increase.

Analysts believe vehicle sales could rebound. “The times of disproportionate growth in 2009 and 2010 are definitely over,” said Klaus Paur, auto market analyst at Ipsos, the market research company.

But Mr Paur still expects 10-12 per cent growth in the car market this year, which "can be considered healthy and significant . . . in light of the long-term potential of the Chinese market".

Bill Russo, head of Synergistics auto consultancy in Beijing and former head of Chrysler in China, added: “Continued growth of the urban middle class, along with continued investment in China’s transportation infrastructure, will continue to fuel demand growth for the foreseeable future.”

He expects China to be a 20m total vehicle market in 2012.

1.09.2012

GM sales buck trend for China slowdown

The Financial Times, January 10, 2012


Click here to read the story at FT.com



General Motors, the biggest foreign automaker in China, defied a slowdown in the Chinese car market to reach record sales last year of 2.55m vehicles.

GM said in a statement on Monday that sales rose 8.3 per cent last year, well below 2010’s 29 per cent but significantly above an expected 4 per cent rise in sales for the total Chinese market, which is the world’s largest. Ford also announced its 2011 China sales yesterday, saying they increased 7 per cent.

Total market figures for last year are expected to be released within days by the China Association of Auto Manufacturers (CAAM), which has previously forecast sales would grow by less than 5 per cent in 2011, compared to 46 per cent in 2009 and 32 per cent in 2010. Auto market analysts attribute the decline to Beijing’s tightening of credit policy last year, and the withdrawal of tax incentives introduced after Beijing’s 2008 economic stimulus package.

Withdrawal of the incentives hit domestic car companies disproportionately hard, because they are strongest in the segments of the market favoured by incentives: small cars. This has allowed foreign automakers – including GM – to increase their market share at the expense of locals.


“The natural preference of the Chinese consumer is to buy as much car as they can afford. If they can afford to buy a multinationally branded car, they will”, says Bill Russo, of Synergistics auto consultancy in Beijing, former head of Chrysler in China.



Foreign market share, which was 69 per cent in 2010, may have risen by two to three percentage points last year – though the vast majority of foreign-branded cars are made in China, by joint ventures between foreign and Chinese companies.


“As the Chinese market develops, Chinese consumers are becoming more mature – and that is challenging Chinese auto brands, while benefiting US and European brands,” says Mr Zhang Junyi, of Roland Berger consultants in Shanghai.

Mr Russo says he expects GM to maintain strong sales growth this year. “If you look at the future, you have to be very bullish about GM in China. Their Baojun product line (the joint venture brand launched recently with partner SAIC) will give them a significant boost in tapping into growth in lower tier markets,” he said.

GM has repeatedly welcomed the slowdown in China’s overheated market. As Dan Akerson, GM chief executive, said in Shanghai in November: “You can’t have totally unbridled growth in a country evolving as quickly as China.”