By on November 23, 2009

Booth babe co-efficient high. Picture courtesy Chinadaily.com.cn

China’s car sales can’t go on forever growing at a 50 percent to sometimes 100 percent clip, auto execs agree at the Guangzhou auto show. All are convinced that the growth will continue next year at a more – what’s the buzzword?- sustainable rate.

The Guangzhou auto show opened today. In case you’ve never heard of Guangzhou, it is a city of around 10m (nobody knows for sure,) and the main manufacturing hub of the Pearl River delta. Formerly known as Canton. About 30 percent of China’s GDP is produced in the South. The opening of the show prompted some major announcements. Here are some of them:

GM China expects its sales to rise by 50 percent in China this year, Kevin Wale said to Reuters. From January to November, GM China sold 1.5m units. GM should close out the year anywhere between 1.6m and 1.7m units sold. For 2010, Wale is cautious, he sees a growth of  only 10 to 15 percent. Which nonetheless should bring GM China close to the 2m mark next year. In any case, Wale is flexible. “We’ve been changing the full-year forecast every month.” Next year, China could be GM’s biggest market.

Toyota doesn’t see much of a slowdown next year. Because their growth in China is pretty anemic this year. Toyota’s China sales should rise about 17 percent to 700,000 vehicles this year from 600,000 in 2008.  Shame on you, Toyota, that’s grossly under-performing the market. Next year? Sales growth is expected to slow to about 14 percent in 2010, with the company aiming to sell about 800,000 vehicles in China.  Said Toyota’s Masahiro Kato to Reuters, before he continued his nap.

Volkswagen’s Vahland  announced lofty goals, but few concrete plans. Especially no concrete as in building a new factory in the South. That announcement was widely expected. Vahland disappointed.  He said his company plans to more than triple its sales in south China by 2018, and wants to double sales to 2 million units by that time. Nothing about a new factory, noting about SEAT coming to China.

Daimler AG’s Mercedes-Benz expects China to surpass the U.K. as its third-biggest market next year. Chinese auto sales will like rise by as much as 15 percent next year, Mercedes-Benz China head Klaus Maier said at the Guangzhou show to Bloomberg. The automaker’s China sales this year will probably rise 65 percent to 65,000 cars, he said.

Nissan targets 20 percent growth for next year and plans to boost its China sales next year to 600,000 units. However, they only have capacity for 500,000 vehicles.

All makers seem to agree that the Chinese auto market will grow by “only” 15 percent or thereabouts next year. Most auto markets in the world would happily take 15 percent. In China, 15 percent more would mean around 14m units sold be end of  2010. Most likely, it will be more. China’s Geely thinks so. They are planning for 20 to 30 percent growth.

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5 Comments on “Auto Execs In Guangzhou: China Will Grow Further, But Slower...”


  • avatar
    Lorenzo

    I’ve read a couple pieces skeptical of China’s auto production numbers. One analyst pointed out that China’s gasoline consumption is just creeping up, and he even speculated that the government was buying up excess production and storing the cars in huge lots somewhere (google earth, anyone?).
     
    It occurs to me that much of China’s earlier rolling stock was based on russian vehicles that were real gas hogs, and modern upgrades could account for more cars with minimal impact on gasoline usage. The gasoline figure doesn’t include diesel fuel either so I wonder what proportion of, say, VW’s China production uses diesel engines. Another explanation for the slower rise in gasoline usage could be the reduction/modernization of China’s army vehicles.
     
    In short, there seems to be a number of ways to account for the discrpancy between additional production and slower gasoline usage. But is there any way to quantify that with the figures available?

  • avatar
    Lorenzo

    I’ve read a couple pieces skeptical of China’s auto production numbers. One analyst pointed out that China’s gasoline consumption is just creeping up, and he even speculated that the government was buying up excess production and storing the cars in huge lots somewhere (google earth, anyone?).

    It occurs to me that much of China’s earlier rolling stock was based on russian vehicles that were real gas hogs, and modern upgrades could account for more cars with minimal impact on gasoline usage. The gasoline figure doesn’t include diesel fuel either so I wonder what proportion of, say, VW’s China production uses diesel engines. Another explanation for the slower rise in gasoline usage could be the reduction/modernization of China’s army vehicles.

    In short, there seems to be a number of ways to account for the discrepancy between additional production and gasoline usage. But is there any way to quantify that with the figures available?

  • avatar
    rnc

    On business insider (on youtube as well) there is a story from Aljeerza (spelling might be wrong), where in inner mongolia they built a city for 500,000 people to generate GDP, city is modern, looks beautiful and….no one lives there, they all like the old city b/c it has the thing that old cities have, soul.  But the local government was told to generate GDP (growth, employment, no revolting masses) and they did.  The theory about the government buying and buying to generate GDP (the gasoline figure correlation you mentioned) isn’t far fetched.  There are stories of households having brand new appliances dropped of now where, but they don’t have electrical capacity or running water to use them, so they just sit there, but it generates GDP.  If the US and Europe don’t recover and start the import binge all over, China is headed for an economic crash and as the japanese found out there is only so much the government can do to hide it. 

  • avatar
    ktm

    Ah Guangzhou, one of my favorite cities.  I lived there for 3 years, met and married my wife there, and was recently back for 2 weeks last year.

  • avatar

    Gordon Chang’s mathematically challenged “analysis” had been debunked on TTAC a while ago: http://www.thetruthaboutcars.com/gordon-g-chang-chinas-car-sales-are-a-fraud
    If anyone thinks 12m cars can be secretly bought by a government and hidden, then he seriously needs to change his medication.


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