Automakers Over-Estimate Chinese Car Market

Edward Niedermeyer
by Edward Niedermeyer
automakers over estimate chinese car market
Auto Motor und Sport reports on a cautionary study by Bain & Company on the Chinese automotive market. According to the report, automakers estimate that the Chinese market will demand 9.3m new cars in 2010. Nein! "Our study shows that automakers are overestimating the Chinese market and are calling for too much production," says analyst Jörg Gnamm. "We're talking about an overestimation of 1.5m vehicles. That's half of Germany's annual sales, and the production capacity of four to five car factories." In other words, they reckon the Chinese market will grow by "only" about 12 percent per year to 7.9m units. Did Jörg mention increasing competition for those sales? Yes he did. Volume automakers like Toyota, VW and GM are the ones who will face the toughest pressures. The warning comes shortly after Renault-Nissan CEO Carlos Ghosn predicted that the Chinese market could cool off in the next few years. And it doesn't factor in any Chinese government move to favor home-grown automakers over mandatory joint-venture "foreign partners." On that score, it's only a matter of time…
Join the conversation
4 of 7 comments
  • Charly Charly on Jul 28, 2008

    It is obvious what China will do when exports drop off. They will make loans much easier. So my expectation is 12 million cars in 2010. 40% bought partially with a loan

  • Hraefn Hraefn on Jul 29, 2008

    Hell, they already have traffic problems. The growth simply is not sustainable.

  • Joeaverage Joeaverage on Jul 29, 2008

    But their traffic problems are mostly in the cities. As people in the more rural areas begin to have money they too will buy cars. I see the Chinese growth treads to last a decade. During that decade their demand for resources will but a real pinch on us. A good construction job in China pays $12 or $14 a DAY. Looks like to me that unless shipping becomes prohibtively expensive, we will be buying Chinese assembled goods for quite some time and the Chinese economy will have plenty of American dollars to buy whatever they needs - raw materials, technology, etc. Your children will be competing for jobs, wealth, and resources with the Chinese children. It doesn't matter how they live in China - just the shear numbers of people in that region tells me that they will dwarf America's consumption in the coming years. Then there is India. Same thing, different methods, same results - vast consumption, stiff competition in the business world. America - get your ducks in order...

  • Joeaverage Joeaverage on Jul 30, 2008

    NPR had a segment this morn about Chinese investment in Africa so they had access to raw materials like copper. Doing the same thing every other big economy has done for the past 200 years just in new places.