Chinese Automotive Market grows 8.97% by the end of May 2014


Chinese Automotive Market grows 8.97% by the end of May 2014

The sky seems to be the limit if you look at the latest figures of the Chinese Automotive Market. Therefore it is not surprising that international car makers such as VW, BMW and GM plan to further expand their production capabilities in the Mainland.

Passenger-vehicle sales in China rose 8.97 percent during the first 5 month, led by General Motors Co. (GM) and Ford Motor Co. (F) as foreign carmakers continued to gain share from local brands in the world’s largest auto market.

Retail deliveries of cars, multipurpose and sport utility vehicles climbed to 1.5 million units in May, the Passenger Car Association said today in a statement on Secretary-General Rao Da’s blog. That’s in line with the median estimate of three analysts surveyed by Bloomberg News.

Foreign automakers are stepping up their investment in China to win market share in the world’s second-largest economy, putting pressure on local carmakers even as more cities consider restricting the number of new vehicles to contain worsening pollution and traffic.

“China’s car demand has been rising steadily this year with foreign brands leading the growth,” said Harry Chen, an automotive analyst with Guotai Junan Securities Co. in Shenzhen. “Both local and foreign automakers are trying to gain more market share as consumers advance their purchases on concern their city may cap the growth in vehicle ownership.”

Separate data from the state-backed China Association of Automobile Manufacturers showed May auto sales climbed 13.9 percent from a year earlier to 1.59 million units. Exports fell 12 percent, while inventory levels rose to a record last month, according to the trade group.

Market Share

Chinese automakers accounted for 21.5 percent of industry car sales last month, a decline of 5.1 percentage points from a year earlier, according to the data. German marques led with 28.7 percent of the market, followed by the Chinese, Japanese, American, Korean and French marques.

GM, which introduced the new Chevrolet Aveo family car in China this month, boosted sales by 9.2 percent in May. Among its brands, Buick sales climbed 15 percent, Chevrolet deliveries rose 13 percent, while Cadillac sales climbed 59 percent.

Ford’s sales surged 32 percent last month to 93,323 units, helped by demand for its Mondeo and Ford Focus cars.

Toyota Motor Corp. (7203) and Nissan Motor Co. (7201) increased sales by about 3 percent, while Honda Motor Co. recorded growth of about 10 percent, according to the companies.

Among Chinese automakers, Great Wall Motor Co., the country’s biggest maker of SUVs, reported a 16 percent drop in sales last month after suspending its new Haval H8 vehicle for the second time this year. Customers had reported hearing “knocking noises” in the transmission system when driving at high speeds, according to the Baoding, China-based company.

Auto Demand

Demand for automobiles in China has been driven in part by concerns that more cities will impose quotas on new vehicles or restrictions on their usage, leading many consumers to bring forward their purchases.

Six Chinese cities, the latest being Hangzhou in eastern Zhejiang province, have imposed quotas on new license plates to combat worsening pollution, More municipalities are considering introducing restrictions, the state-backed China Association of Automobile Manufacturers said last year.

“People are rushing to buy their second car, not to mention those who haven’t gotten their first one” to beat potential curbs, said Guotai Junan’s Chen. “There’s no guarantee the government won’t put up restrictions some day so the fear is always there.”

China currently has enough roads and infrastructure to accommodate at most 300 million vehicles, while the number of driver licenses holders is expected to reach 1 billion in the next 10 to 15 years, according to the auto association.




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