Following a year of record results which put China’s vehicle market firmly in the number one position in terms of sales globally, the China Association of Automobile Manufacturers (CAAM) reported a year-on-year rise in sales in February of just 4.6%. Despite continued growth year-on-year, it also marks a slowdown, and a 33.1% month-on-month decline. Furthermore, the China Passenger Car Association (CPCA) reported a 0.4% decline year-on-year in passenger vehicle sales in February, down 37.3% month-on-month.
China’s February sales results reflect uncertainty in the market following changes in government incentives and taxation, rising interest rates, tightening credit (despite increasing credit take-up), rising fuel prices and the introduction of restrictive measures designed to cap new car sales, such as Beijing’s controversial car registration lottery.
As well as now being the world’s largest single vehicle market, China will soon pass NAFTA and the EU in terms of vehicle sales. In 2010, China accounted for more than 20% of global passenger car sales.
A new report by AutomotiveWorld.com, entitled “China’s new vehicle market: prospects to 2015“, along with two recent associated webinars on passenger and commercial vehicles, examine the prospects for China’s automotive market over the next five years.
The report identifies and explains key differences between the reported (18.06 million units, according to CAAM) and actual number of vehicles sold in China in 2010 (19.21 million units according to this report), and provides a forecast for the market to 2015.
In 2010, according to the AutomotiveWorld.com report, light vehicle sales accounted for 17.25 million units. To put this into perspective, light vehicle sales in the US stood at 11.6 million units
As well as now being the world’s largest single vehicle market, China will soon pass NAFTA and the EU in terms of vehicle sales. In 2010, China accounted for more than 20% of global passenger car sales. In 2010, according to the AutomotiveWorld.com report, light vehicle sales stood at 17.25 million units. To put this into perspective, light vehicle sales in the US totalled 11.6 million units, while passenger cars accounted for 4.61 million of the 4.96 million vehicles sold in Japan in 2010. In Brazil, the vehicle market totalled 3.52 million units, while in India, passenger cars, utility vehicles (UVs) and MPVs accounted for just 2.37 million of the 14.82 million units sold in 2010.
Just as with the Indian market, an in-depth analysis of the sales data for China reveals a series of complicating factors which hide the true number of vehicles sold. CAAM is the source relied on for China vehicle sales data. However, CAAM data includes exports and excludes imports. Further comparability difficulties arise because, as with US data, for example, CAAM data is for “light vehicles”, including alongside passenger cars vehicles that would be counted elsewhere as light commercial vehicles.
The HCV market, which grew 37.8% year-on-year to 1.95 million units in 2010, is also set to slow. Within the HCV category, however, heavy trucks will outperform the segment
Despite an expected slowdown in the Chinese economy and various changes in purchasing conditions which are likely to slow growth in light vehicles, and in particular passenger cars, light vehicle sales are expected to remain positive. The report suggests that the HCV market, which grew 37.8% year-on-year to 1.95 million units in 2010, is also set to slow. Within the HCV category, however, heavy trucks will outperform the segment, thanks to ongoing long-term construction and infrastructure development programmes over the next five years and beyond.
Coincidentally, the period covered by this report is the same as China’s imminent Twelfth Five-Year Plan (2011-2015), which in terms of the automotive industry is expected to focus on the development of alternative-energy vehicles and related infrastructure, encourage automotive industry consolidation and promote domestic OEMs’ sales in China and overseas.
Far from signifying the end of China’s desire for new cars, February’s results are likely to be a reality check in a total market which the AutomotiveWorld.com report expects to grow by over 40% between now and 2015.
Martin Kahl is Features Editor at AutomotiveWorld.com. editorial@automotiveworld.com
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