China is estimated to have sold 790,000 cars in January this year, while the US sold 668,000 cars during the same month. This marks the first time that China has overtaken the US in monthly auto sales, said Mike DiGiovanni, executive director of global market and industry analysis at General Motors Corporation during GM's monthly sales meeting in the US.
"This is the first time in history that China has passed the United States in monthly sales," DiGiovanni said.
Based on January's figure of 790,000 units, China is expected to sell 10.7 million vehicles this year, he added.
China will still be unable to surpass the US in total sales volume in the auto market this year. However, China's auto market is becoming a powerful new player, according to the analysis of experts in the industry.
Governmental measures help to pick up the market
After passing the Proposals on Structure Adjustment of the Automobile Industry, China reduced the purchase tax on vehicles to stimulate consumption.
It also launched measures to encourage independent innovation and put local marketing of environment- friendly cars in its agenda.
Many auto enterprises have quickly responded by making full use of the positive opportunities provided by the proposals to start a new round of "market-making."
The Proposals on Structure Adjustment of the Automobile Industry encourage consumers to buy small-displacement cars, and at the same time greatly supports auto enterprises in developing and producing more environment-friendly products. It can be said that the proposals consider not only the need to stimulate auto consumption in the short term, but also the objective of promoting long-term healthy development in the auto industry. They will definitely produce far-reaching effects on the future development of China's auto industry, said Yao Yiming, executive vice president of Guangzhou Honda.
Jin Gebo, assistant to the board chairman of Chery Automobile Stock Holding Company, believes that the company's strategic advantages in the four areas of small-displacement vehicles, new-energy vehicles, minibuses and core vehicle parts and exports will allow Chery to fully obtain the benefits from the implementation of the Proposals on Structure Adjustment of the Automobile Industry, and will hopefully promote the sales volume of Chery automobiles to boom in the second half of 2009.
Staff in the public relations department of BYD Auto said that the Ministry of Science and Technology and the Ministry of Finance have clearly declared that they will support domestic automobile enterprises in developing new-energy projects. This is big encouragement for domestic automobile enterprises. They will not only offer remarkable support for the development of new-energy automobile projects, but will also greatly improve overall development of the entire enterprise.
Since the rate of growth of vehicle sales volume noticeably slowed down in the second half of last year, many high-level executives of automobile enterprises hold almost the same attitude when talking about the trend of the vehicle market this year: cautious but optimistic.
China likely to produce automobiles for the entire world
Due to the slump in demand brought by the global crisis, auto manufacturers worldwide are experiencing sharp recession. Toyota, Japan's most profitable car manufacturer, has forecast its first operating loss in 71 years of 150 billion Yen.
Although global automobile giants are facing difficulties, their operations in Chinese mainland have generally been unaffected.
Data collected at the end of October 2008 show that GM had a total sales volume of 913,400 automobiles in Chinese mainland, an increase of 9 percent year on year. Seeing similar situation, Ford Motor Company decided to move its Asia-Pacific and African headquarters to China, while its original Asia-Pacific and African headquarters in Bangkok will continue to serve as Fords Southeast Asia regional headquarters.
Currently, Guangzhou Toyota Motor Company's first plant is utilizing its full production capacity of 200,000 automobiles a year and a second plant is under construction. Feng Xingya, executive deputy general manager of the Guangzhou Toyota Motor Company, believes that the company's sales volume is certain to gain in 2009.
"As all automobile giants are heavily hit by the global financial crisis, they will become more dependent on the Chinese market which is still profitable. If they want to survive, their demand for low-cost manufacturing will grow. Therefore, transferring production capacity, technology and management to China is one of the only options. China should get ready to meet this industrial upgrading and transfer'," said Zhou Zixun, an analyst with the research headquarters of Anbound Group.
Experts believe that the day when China manufactures the world's automobiles will arrive earlier than previously expected, owing to the impact of the financial crisis.
Rapid growth of markets in second and third-tier cities
Statistics released by the National Passenger Car Information Exchange Association show that automobile sales in central and western China increased 24 percent last year, much higher than the national average. In fact, signs of sales growth slowing and market share shrinking in first and second-tier cities have been monitored as early as 2005.
Compared with the markets of first-tier cities, where auto markets are close to saturation, second and third-tier cities will become a major driving force for China's auto market in the future.
Currently, companies like FAW Haima and Geely have made efforts to develop the market of second and third-tier cities. They are working on the improvement of sales network, trying to enhance the software and hardware facilities at each sales outlet, as well as customer and post sales service.
Central and western China will become a new area of growth and the 20 new dealers signing sales contracts with Ford were all from second and third-tier cities, said He Junjie, general manager of ChangAn Ford Mazda Automobiles.
Dongfeng Honda added 54 dealerships last year, 55 percent of which are in second and third-tier cities. Improving service quality will be the main task of their sales network in coastal areas, while priority will be given to increasing quantity in China's central and western regions as well as China's second and third-tier cities.
With the rapid development of second and third-tier markets, experts estimate that in the future this market will be the main battlefield for automobile producers and that competition will become increasingly fierce.
Source : http://english.people.com (2/16/2009)
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