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Slower growth expected in 2010 for global auto market
After a landmark year in which China zoomed past the United States and Chinese automakers made some major acquisitions abroad, Beijing’s renewed policy incentives to bolster demand will likely keep it as a bright spot for car manufacturers battered by the financial crisis.
Vehicle sales in the country jumped to a record 13.6 million units in 2009, the China Association of Automobile Manufacturers said on Monday, well above the country’s previous target of 10 million units. That compared with annual sales of 10.4 million cars and light trucks sold in the United States, the lowest level in 27 years.
The Chinese tally, which also includes heavy vehicles, is still higher than that of the United States after deducting roughly 650,000 units of heavy trucks, Orient Securities said.
“Sales have been extremely hot in most parts of last year with little seasonal changes. Many people have to wait for weeks or even months to get their cars,” said Qin Xuwen, an analyst with Orient Securities.
China’s passenger car sales jumped 52.9 percent to 10.3 million units in 2009, rebounding sharply from single-digit growth a year earlier, official data showed. Car sales in December surged 88.7 percent to 1.1 million units, topping 1 million units for monthly sales for the third time this year.
Analysts attributed the boom largely to Beijing’s policy initiatives, which had effectively lifted market sentiment and attracted buyers back to showrooms. A low comparative base in 2008, when car sales slowed to a single-digit growth rate for the first time in at least 10 years, also helped inflate the 2009 growth rate.
The market, they said, would return to a slower but more rational growth rate of roughly 10 percent in 2010 on continued policy support from the government even though the renewed tax incentives for small cars were not as aggressive as expected.
Industry executives themselves, including Chen Hong, president of SAIC Motor Corp, China’s biggest automaker and a GM partner, remain sanguine about the outlook for next year, due largely to pent-up demand in smaller cities where cars are no longer a luxury item as wealth grows.
China is now a safe haven for industry heavyweights battered by a sharper-than-expected industry downturn, which had forced two of Detroit’s big three automakers into bankruptcy in 2009.
“China used to be the one that was eager to attract big, outside investment, but it’s the other way around now,” said Zhang Xin, an analyst with Guotai Junan Securities. “It’s a market too important to ignore.”
Uphill battle
The past year has seen Chinese automakers venturing on to the global stage for the first time in a major way, ready to snap up big-name brands, such as Volvo and Hummer, which they previously admired from afar.
But Chinese automakers are still facing an uphill battle to become truly global players, industry observers said. “It’s no surprise China’s auto industry wants to go international,” said Klaus Paur, director of global industry consultant TNS’s North Asia Automotive division. “But I have the impression they are getting too ambitious. There are a lot of question marks here as they don’t even have a solid brand in their home market.”
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