Kevin Wale, president of GM China, is convinced that China has passed the U.S. for good as the world’s largest auto sales market. He expects China’s growth to continue, creating a gap that will be too large for the U.S. to close, says AP.
As reported ad nauseam, vehicle sales in China last year rose 46.2 percent to 13.64m units. For this year, cautious industry association projections expect somewhere between 15m and 16m units to change hands.
Wale thinks Chinese auto sales will be anywhere between 14.5m to 15.5m by the end of this year. For the U.S., analysts predict 11.5m to 12m.
Very optimistic analysts reckon the two countries could be trading places until 2015 when China firmly takes the lead. Wale isn’t one of them. He doesn’t think the U.S. will ever regain the lead.
This time, TTAC agrees with Wale. “China will grow again next year, which means that the U.S. has to pick up five million in two years to stay in the race,” Wale said. “Got your chips?”
And then there’s the perception gap, China style:
Many U.S. buyers have negative impressions of GM brands because of quality problems “of the past,” or because the company was in bankruptcy protection and had to take U.S. government aid to survive.
In China, GM brands, especially Buick, are well received among China’s growing middle class and younger population. Interesting data point: The average age of a Buick buyer in the U.S. is 66, Wale said, but it’s half of that in China.
Kevin Wale has reason to be boisterous. Whereas GM has, well, fiscal problems, GM is solidly profitable in China, Wale said, without giving specifics. Here is some indication: Joint venture partner SAIC, who not only has GM, but also VW under its belt, announced a few days ago that its net profit rose more than nine times compared to 2008. Which would amount to $900m or so this year. SAIC sold 2.72m units this year. Of that, around 800K GMs. Back of the envelope: If GM realized $150m in profits in China, then they’ve been doing really well.