Auto sales in China, including those of cars and buses, may accelerate this year and surpass 20 million units for the first time, spurred by a rebound in economic growth and urbanization.
Wholesale deliveries may gain 7 percent this year to 20.65 million units, led by demand for passenger vehicles, the state- backed China Association of Automobile Manufacturers said in a statement in Beijing today. SUV sales will remain the fastest- growing segment, while commercial vehicles will post a slight gain, according to the projections.
“A continuous and stable macroeconomic policy will be good for the development of the vehicle market,” CAAM said. Vehicle demand will be supported by urbanization and there exists a big market potential for exports, the group said.
While Chinese auto demand is forecast to accelerate this year, the pace of growth remains less than a quarter of the stimulus-led 32 percent rate in 2010, as cities including Beijing and Guangzhou restrict new vehicles to reduce smog and traffic jams. Competition for market share is poised to intensify as foreign automakers led by General Motors Co. (GM) and Volkswagen AG (VOW) step up their push into smaller cities traditionally dominated by local brands.
“Not everyone will be the winner but some of the automakers that invest previously in R&D will be,” said Jeff Chung, Hong Kong-based analyst at Daiwa Securities Group Inc. (8601) “The automakers with the best product mix, best geographic mix will still enjoy very high growth rates.”
Passenger-vehicle sales may climb 8.5 percent to about 16.8 million units, CAAM estimates, while commercial vehicle sales will probably rebound from last year’s 5.5 percent contraction to gain 1 percent to about 3.85 million units.
Ford Motor Co. (F), whose top seller in China in 2011 ranked 10th, had the best-selling sedan in China last year with the Focus. The car beat GM’s Chevrolet Sail and Buick Excelle --last year’s top seller. Great Wall Motor Co. (2333)’s Haval was the most popular SUV model, according to CAAM data.
Auto sales in China rose 4.3 percent to 19.3 million last year, missing official projections for deliveries of as much as 20 million made in July. Passenger-car sales rose 7.1 percent to 15.5 million units in 2012, with SUV the fastest-growing segment at 26 percent gain, CAAM said.
Still, China is seen as the top investment destination for global automakers as the country has “significant domestic demand and export opportunities,” according to a survey of 200 auto industry executives by KPMG released yesterday. The industry may see more consolidation and midsize automotive deals overseas as it focuses on acquiring key technologies, KPMG’s survey found.
The number of private passenger vehicles in China was 62.4 million at the end of 2011, a sevenfold increase on the 8.45 million at the end of 2003, according to National Bureau of Statistics data. The number of cars may surpass 200 million by 2020, the official Xinhua News Agency reported on July 31, citing the Ministry of Transport.
Total vehicle exports last year jumped 30 percent to 1.06 million units and are projected to gain 25 percent to 1.3 million, according to CAAM.
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