SAAR Crisis: China May Sell 11 Million This Year, USA 9.5 Million

China’s automobile sales will “definitely break the 10-million-unit barrier” in 2009, says the China Passenger Car Association. Scratch that. The association said that “automobiles sales in China will touch 11 million units this year, on the basis of the total number of vehicles sold across the country in the first five months.” The forecast wasn’t made by reading green tea leaves. Sales have risen for the fifth consecutive month. May left everybody stunned with a 55 percent rise. China’s double digit growth came to a screeching halt last year. Now China is off to the races again and feeds dust to all others.

In late 2007, early 2008, the Chinese government slammed on the brakes of what looked like an overheating economy. Auto sales promptly slowed down in the first half of 2008. Global carmageddon sent growth into negative territory in July 2008.

As a result, China missed its 2008 target of 10 million units sold. It closed out the year with 9.38 million sold, a rise of only 6.7 percent compared with the previous year. That was the lowest increase in 10 years. Some prematurely pronounced the burst of a Chinese bubble. The unwashed even talked about a saturated Chinese market.

Saturated? It’s hungry, and it’s roaring.

After a slow start in January, China jumped into double digit growth territory again in February 2009, and kept going, and going, and going . . .

As a result, China has, for the fifth consecutive month, beaten the contracting US as the world’s largest automobile market, China Daily reports. A dead cat bounce this is not. “The growth in the passenger car segment will probably continue in June to hit a new monthly record, which will boost the whole-year sales to the 11-million-unit mark,” said Rao Da, who is secretary-general of the association. And then?

In China, sales in the second half usually are much better than that in the first six months. If May 2009 was 55 percent above May 2008 (which still had recorded a 15 percent growth over the same month in 2007), wait until the second half of the year, which compares with declines in the second half of 2008.

While China is looking at 11 million (or better) sales in 2009, the US is in the grip of a SAAR crisis. The seasonally adjusted annual sales rate fell from 15.4 million units in February 2008 to 9.1 million a year later. In May, SAAR had improved to 9.5 million units—and that’s what it will average for the year, analysts expect.

By the end of the year, China will be way ahead of the US of A. The US has more cars than driver’s licenses. According to Nationmaster, there are 765 cars per 1000 people in the US, whereas China has only 10 per thousand.

These numbers are regarded as outdated; current estimates put China in the 40 per thousand range. With an official population of 1.3 billion (around 1.5 billion unofficially), China’s mobility market has a long ways to grow. China is already the world’s largest auto market, and its mass motorization has just begun.