The China market beckons as a bright beacon for global automakers floundering in other choppy vehicle markets hit hard by the global financial crisis.
A model walks past the new MG6 from SAIC after it was unveiled on the opening day of the Shanghai International Automobile Exhibition yesterday. [Agencies]
Overseas and domestic carmakers are showing off more than 900 models at the 13th Shanghai International Automobile Industry Exhibition, which has a total floor of 170,000 sq m - a fifth more than the previous event in 2007.
First-quarter vehicle sales in China grew by 3.8 percent year-on-year to 2.68 million units, enabling the country to outstrip the US as the world's biggest vehicle market, according to latest industry data.
The China Association of Automobile Manufacturers forecasts full-year vehicle sales to reach 10.2 million units, up almost 9 percent from last year.
Passenger car sales in the country will grow 7 percent to 6.1 million units, Yale Zhang, director of Greater China Vehicle Forecasts for US consultancy CSM Worldwide Corp, said on Monday.
His predictions are backed by auto majors.
"China's overall auto market may grow by 6 percent this year while the luxury segment will be double the growth," said Dieter Zetsche, chairman of Daimler AG and Mercedes-Benz.
The premium brand's China sales jumped 30 percent to more than 11,000 vehicles in the first quarter.
Nick Reilly, General Motors' Asia-Pacific president, on Monday said the group expects the China vehicle market to rise between 5 and 10 percent this year.
"From a long-term perspective, the local market will continue to grow by between 7 and 9 percent over the next five years," he added.
The Detroit-based company, which is struggling to avoid bankruptcy, sold 363,701 vehicles in China in the first three months of this year, an increase of 16.8 percent from a year ago.
Earlier this month, GM announced plans to double its China sales to more than 2 million units in the next five years from last year's figure. It is displaying 37 models at the motor show, including one making its global premiere and five making their Asian debuts.
Katsuaki Watanabe, global president of Toyota Motor Corp, said China's economy and the auto industry are continuing to grow steadily amid a global downturn.
"This should be attributed to China's sound economic fundamentals and the government's stimulus policies," Watanabe said.
China's GDP grew 6.1 percent in the first quarter of this year, the slowest quarterly pace since 1992. However, analysts said the country's economy has hit the bottom and will start to rebound in the second quarter as a result of the government's pro-active measures.
Andy Palmer, senior vice-president of Nissan Motor Co, on Monday told reporters that the Japanese carmaker plans to launch 10 passenger car models and five light commercial vehicles in China before 2012.
The company's sales in China are expected to grow 5 percent year on year to 570,000 vehicles this year, Palmer said.