U.S. Epic Fail Might Make China World's Largest Auto Market For 2009

by Bertel Schmitt

February 9th, 2009 12:18 PM

u s epic fail might make china world s largest auto market for 2009

In January, China’s auto sales for the first time in history exceeded America’s, making China the world’s largest auto market for the month. As we said, sooner than later, China is bound to outclass the US of A solidly. Xu Changming, director of China’s economic consultative center under the State Information Center, thinks that it is quite possible that China will overtake the United States as the World No.1 car market for all of 2009: “Chinese auto sales are expected to grow 4 percent to 5 percent from 9.38 million units sold last year, more than the estimated 9 million unit sales in the U.S. this year.”

“But this figure is not something we should feel proud of since the U.S. was just plunged into an economic recession,” Xu warns according to Gasgoo. “Once the recession ends, America can retake the sales crown by selling 16 million–17 million vehicles annually.” So even if China takes the crown this year, they might lose it, and then “China still needs at least four to five years to eventually catch up with the U.S. in the auto sales total,” said Xu. And he has reason for caution . . .

China’s parts manufacturing industry, which largely exports (or exported) to the US, is hurting. A return to 16m SAAR in the U.S. definitely would be more beneficial to the Middle Kingdom than the dubious crown of being top dog of the world’s anorexic auto market.

China’s January auto sales are looking healthy. Car sales including SUVs totaled 647,594 units, down 0.2 percent from a year ago but up 0.5 percent from December, data from the China Passenger Car Association (CPCA) showed. And this with a whole sales week missing, due to the Lunar New Year falling in the last week of January this year. In the US meanwhile, auto sales in January tumbled 37 percent to 656,976 vehicles, hitting a 27-year low.

#BertelSchmitt #China #Number1 #SAAR #USA

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Bertel Schmitt on Feb 09, 2009

@no_slushbox: Chinese autos have very little value added compared to western autos, so the price of metal and other raw materials has a much larger percentage effect on price. When was the last time you were in China? In your dreams? Looks like mpresley has more recent information.

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No_slushbox on Feb 10, 2009
Bertel Schmitt: "The Chinese like Merc, BMW, and Audi–the big ones, too. SZ has a Bentley dealer, and I saw a few on the road. Plenty of VWs (a Jetta that looks like the old Quantum is their main taxi, the latest Jetta is a Sagitar–probably named to distant it from the taxi), a few Buicks, Toyotas not imported into the US, Citroen, Nissan Bluebirds, and on and on." The last time I checked those were all Western automobiles, not Chinese. Admittedly some were produced in forced joint ventures where a Chinese guy followed around a Westerner trying to figure out what is going on despite having an engineering degree that equates to graduating with AP classes from a good US high school. And please tell me what province the Bentley factory is located in. Compare cars that actually have Chinese names on them to Western cars and you will find that, comparatively, the Chinese cars have very little value added to the raw materials. The same is true of any cheap developing market car. Before the factory issues it was the spike in raw material prices that threatened to kill the Tata Nano. Lower value added will not always be the case, especially after the Western factories are repatriated and those cars given Chinese badges, but it is the case for now, which makes me think that if raw material prices go back up it could cause some problems for the Chinese auto market.

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