Auto growth is slowing, but market future bright

By Han Tianyang (China Daily)
Updated: 2011-05-30 13:11
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BEIJING - A senior industry expert predicts that China's automobile production and sales will both grow to about 30 million units by 2015 compared to the 18 million vehicles sold last year.

From 2006 to 2010 the country's auto production and sales grew an average of about 25 percent annually, but for the next five years the growth rate is likely to be around 10 percent, said Dong Yang, vice-chairman of the China Association of Automobile Manufacturers (CAAM).

But he noted that this year the auto market will fail to hit previously projected growth of 10 to 15 percent. "It may be even less than the rise in GDP," Dong said.

China's GDP is likely to grow 9 percent in 2011, according to a report released by the Development Research Center of the State Council last month.

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Last month, China's auto market recorded its first decline in sales in the past two years in both year-on-year and month-on-month figures.

Expiration of tax rebates on small cars, limitations on new car plates in big cities, the worsening economic environment and the hangover from torrid growth in 2009 and 2010 are all playing a part in the slowing market, analysts said.

Yet the Chinese auto market still has huge potential over the long term, Dong said.

Globally every 1,000 people own 130 to 140 automobiles, while in China the figure at present is only 50, Dong said.

He forecasts that auto exports will also surge in the next five years.

The nation's car shipments - including cars assembled overseas - account for only 3 percent of total sales, which is an "unreasonable situation" Dong said. He envisions the proportion will be 10 percent to 15 percent in 2015.

Dong made his comments at a recent conference by China Machinery Industry Federation (CMIF) and CAAM as both organizations announced the top 100 companies in China's machinery sector and the 30 strongest automotive companies, which were selected according to their revenues last year.

According to the organizers, 21 auto manufacturers, four parts suppliers and five motorcycle makers made the top 30.

The first six places were taken by SAIC, FAW, Dongfeng Motor, BAIC, Guangzhou Automobile and Chang'an.

SAIC reported the biggest revenue - more than 600 billion yuan - last year, while sixth-place Chang'an reported 135 billion yuan.

In 2003, FAW was the only Chinese automaker to generate revenue of more than100 billion yuan.

While the progress made by big automakers should be recognized, their distance from international competitors should also be noted, said Cai Weici, vice-chairman of CMIF.

Currently no Chinese automaker is among the world's top 10, Cai said.