By on October 14, 2009

Boooom! Picture courtesy cartage.org.lb

China’s auto sales have most likely broken the 10 million unit sound barrier at the time of this typing. This according to educated estimates of the China Association of Automobile Manufacturers (CAAM) via Gasgoo. The association expects annual sales for 2009 to surpass 12 million.

In September, China’s auto sales had soared 78 percent (compared to September of the prior year) to 1.33m units. Sales of passenger cars, including sedans, SUVs and MPVs, rose 83.6 percent to 1.02m units. September marked the seventh straight month in a row that China’s car sales exceeded one million units a month.

For the first nine months of the year, China’s vehicle sales increased 34.2 percent.

Beginning in January 2009, China’s total car sales exceeded those of the United States. The lead of the Chinese market has extended ever since. China’s Global Times reports that during the recent eight day October holidays, 10,000 cars were registered in Beijing alone. China’s capital, which had one million registered motor vehicles in 1997, now has 3.88m

Analysts already warn that 2010 growth will be lower than the record numbers in 2009. According to the analysts cited by Gasgoo, “the industry will still grow, albeit at a slower pace.” The second half of 2008 was disappointing for China, comparisons with last year show huge increases. Next year, it will be harder to exceed current record numbers.

China’s GM doesn’t share this cautious opinion. “We expect our sales to continue to grow, even a little faster than the industry next year,” GM China’s President Kevin Wale told reporters. In the first nine months of 2009, GM China’s vehicle sales jumped 55.6 percent from a year earlier, hitting a record with 1,292,549 units sold.  GM’s Henderson believes that China will stay ahead of the USA for quite some times. “It’s not a blip,” Henderson said to AFP. Quite perceptive.

Ford’s Mulally hopes that total U.S. industry sales will be 11 million in 2009, rising to 12.5 million in 2010 and to about 14.5 million in 2011. At that rate, the U.S.A. will never catch up with China.

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37 Comments on “Chinese Car Sales Break Sound Barrier...”


  • avatar
    Autosavant

    It is important to mention here how much smaller than Chinese Car Sales are Indian Car sales.

    Because many treat The Econ Giant that is China, and its potential, and India, mired in bureaucracy, as if they are equally important to the world economy.

    China may exceed the US in car sales, and many of the cars sold there are not $2,000 Tata Nanos (not that there is anything wrong with the Nano) but full-sized and high-priced luxury imports and domestics.

  • avatar
    tom

    Nice to see that you’re back Bertel…I was wondering where you’ve been…

  • avatar
    Jonathan I. Locker

    Does anyone know why Chinese Domestic Market is on overdrive right now? Government intervention? Change in spending habits of the population? Made up numbers?

    I really have no idea what would cause such an uptick. Any links would be appreciated.

  • avatar

    No made up numbers. And this is just the beginning. China is set to become the world’ third largest economy. Yet, its car density is only approx 40 per thousand compared to 800 per thousand in the US. China has a population of approximately 1.5b people. Good for 750m cars.

  • avatar
    PeteMoran

    Good for 750m cars.

    In your dreams, you work in the auto parts manufacturing business after-all.

    80 per thousand will cause massive energy problems, not just at home but around the world. Chinese officials are worried.

    100 per thousand will require near double the current infrastructure spending on roads (which is already absolutely massive and resented).

    150 per thousand and Chinese people will begin to wonder why they have them with no where to drive.

    You really ought to bone up on some demographic data Bertel, not just near-translations of Europe or the USA into China.

  • avatar
    Autosavant

    “PeteMoran :
    October 14th, 2009 at 9:09 am

    Good for 750m cars.

    In your dreams, you work in the auto parts manufacturing business after-all.

    80 per thousand will cause massive energy problems”

    Not necessarily. You are making assumptions that the chinese cars will be driven as many miles per year as cars in Europe, or, worse, in the USA!

    Most large cities in China have fantastic Metros and other mass transit. People there do not “need” cars like most Americans need them, because there is no alternative.

  • avatar
    Billy Bobb 2

    First generation to progress from Bicycle to Car.

    Huge opportunity for Body Shops.

  • avatar
    Autosavant

    Indian sales far less than CHinese ones: Latest Data:

    “MUMBAI, India — India’s auto sales rose 17.1 percent in September from a year earlier to 212,975 vehicles, as holiday buying, easier credit and rising consumer confidence fueled growth in India’s auto sector.

    Sales of passenger cars rose 20.6 percent, to 129,683 units, while the recovery in commercial vehicle sales gathered pace, with growth of 6.5 percent, to 45,451 units, the Society of Indian Automobile Manufacturers said

    This marks the eighth month of recovery for Indian car sales, which began to turn in February thanks to government stimulus measures and resilient domestic demand. So far this fiscal year, from April through September, car sales are up 14.7 percent over last year, beating industry expectations.

    Global automakers like Ford, General Motors and Nissan have been pushing into India’s small but fast-growing auto market, hoping to secure a foothold for future growth and a new base for low-cost manufacturing.

    “September was another good month for auto sales due to increasing finance availability, improved consumer sentiments and new product launches,” Macquarie analyst Sanjay Doshi wrote in a research note. “We expect sales to remain robust during the ongoing festive season.”

    Exports also grew as rising car exports masked a steep fall in commercial vehicle shipments. Passenger vehicle exports rose 21.6 percent, to 38,992 units, while commercial vehicle exports fell 24.3 percent, to 3,839 units.

    Market leader Maruti Suzuki posted domestic sales growth of 17.3 percent in September, while exports surged 85.4 percent, driven by overseas demand for the popular A-Star compact.

    Tata Motors, India’s largest commercial vehicle maker, reported 5.8 percent growth in total volumes, but suffered from a 36 percent drop in exports of goods carriers, to 962 units.

    Most Indians, however, still prefer two-wheelers: Motorcycle sales grew 6.3 percent, to 838,150 vehicles, and exports rose 8.8 percent, to 95,562 vehicles.

  • avatar
    Adub

    Pete, can you provide facts and citations to back up your bald assertions and condescending attitude?

  • avatar

    replying to J. Locker: Car sales increased for a few reasons: the economy is still growing strongly (8+% for 2009), there is huge pent-up demand as China’s coasts move solidly into middle-income territory, and local manufacturers have improved quality while holding prices down (severe competition among domestic brands).

    What I find most surprising is that sales increased across the board even though a punitive tax was enacted on large (I think 1.8+ liter) engines.

    Like people around the world, the Chinese want and buy cars as soon as they have the income. Gas is cheap and the roads are beautiful (albeit dangerous because of other drivers).

  • avatar
    Kristjan Ambroz

    Second that – nice to see you back, Bertel :)

  • avatar

    PeteMoran: I worked for VW from 1973 to 2005. We used the 500 cars per thousand benchmark number (some day …) back in 1984 when the Santana came to China. We were right. Some day, they’ll be there. If it takes them 20 years, that would be 37.5 million cars a year. Ok, give them 30 years.

    Russia went from cars for the nomenclatura only to 225 cars per thousand. During this year’s IAA, Matthias Wissmann, President of the German Association of the Automotive Industry (VDA) said about Russia: “With a passenger car density of only 225 cars per 1000 people, there is a huge need for catching up.”

    If the 8th largest economy of the world (Russia) is allowed to have 225 cars per thousand (and a huge need of catching up) why won’t you allow the third largest economy (China) even 80 cars per thousand? Scared that they buy all the gas while the USA has more cars than people with driver’s licenses?

    Those who fantasize about bicycles and straw hats should buy a ticket to China. Or live forever in ignorance. Beijing is even banning motorcycles and scooters from inner city streets.

  • avatar
    RetardedSparks

    “At that rate, the U.S.A. will never catch up with China.”

    Why on earth would we want to? Just to sell more and more and more cars to people with worse and worse credit? Are we so obsessed with being “first” that we’d be first over a cliff, too?

    “Some day, they’ll be there. If it takes them 20 years, that would be 37.5 million cars a year. Ok, give them 30 years.”

    Again, in what world is energy supply going to encourage or perhaps even allow this? Do you see this happening with $8 (equivalent) gas? $10? $15?

  • avatar
    Autosavant

    China is as much bigger than the US as the USA is bigger than the UK.

    If China continues its rapid Econ growth, even if it slows down a bit, eventually it will be a far far far larger market for new cars than the US,

    JUST AS the USA is a far, far far bigger market for new cars than the UK.

    I am surprised that Russia, with all its low standard of living and poor health and low life expectancy and all that, already has 225 cars per person. I bet most are worthless beaters and cheapo, primitive Ladas and other domestics.

    Having spent more than one full month in China (Shanghai mostly), if you only visit the large cities they appear very prosperous and western-like with a ton of cars on the streets, but if you look out your train window in the middle of a trip from Shanghai to Beijing, you can see how poor the farmers are, in their unpainted brick homes and out in their rags looking at the train..

  • avatar
    Autosavant

    There is plenty of energy, even oil, if you include unconventional oils, the USA alone is four Saudi Arabias, and Canada already extracts millions of barrels every DAY from its Alberta oil sands,

    and all the deepwater oil and land-based oil not explored and found yet.

    Demand will also rise a lot, and prices will assure supply and demand is met.

    Ignore the “peak oil” Charlatans. They have been wrong every time they have rpedicted a WORLD oil production peak, and the mindless TV media that have them on again and again, never question them fdor their 100% record of failure. They are satisfied with the “gloom and doom” arrogant and utterly unscientific predictions, it increases their ratings, and that’s all that matters to them, Science and the Truth be damned!

  • avatar
    Robstar

    With nowhere near the environmental controls of the USA, a smaller land size (IIRC), less freedom to speak out about government and massive cash reserves, couldn’t china simply build (more?) nuclear reactors, develop their own electric car for $cheap+infrastructure and sell that to the people as the solution of making cars available to everyone?

  • avatar
    Autosavant

    “With nowhere near the environmental controls of the USA, a smaller land size (IIRC), less freedom to speak out about government and massive cash reserves, couldn’t china simply build (more?) ”

    CHina is doing everything, building more nuke reactors and even wind and solar, on top of its considerable expansion of hydro power with the 3 gorges gigantic dam, but coal fired plants are still by far the cheapest option for them, and they still have plenty of coal to mine.

    When i was in Shanghai in 06 I was intrigued by the small all-electric scooters (that could carry a driver and a passenger) young people used to move around in, and asked how much they cost, and was told arounf US $1,000, which sounded too low to me.

    nuclear reactors, develop their own electric car for $cheap+infrastructure and sell those?

  • avatar
    PeteMoran

    @ BS

    We used the 500 cars per thousand benchmark number (some day …) ….. give them 30 years

    500 was the number in Europe, therefore 500 is the number for China. That’s your logic/claim? Let’s call it “gut feeling” then shall we??

    30 years? I’ve seen population estimates of between 1.75 to 2.25 BILLION in China alone by that time, so perhaps 1 BILLION cars????

    I spent two days in May with Chinese officials from the Energy Ministry/Energy Bureau during the finalisation of a massive LNG contract with one of our clients. They openly discussed China’s oil problems and the need to reduce consumption.

    Chinese domestic oil production (IIRC) is about 200 million tonnes, but at current rates they will NEED 450 to 610 million tonnes by 2020. During 2000-2006 China was resposible for 31% of the growth in oil demand. (World Bank figures or IMF -looking now).

    Where is the energy going to come from???? They don’t know yet. It’s just total nonsense. The impression I got was that the Chinese regime recognises that they won’t be able to allow rapid adoption of the car.

    During this year’s IAA, Matthias Wissmann, President of the German Association of the Automotive Industry (VDA) said about Russia: “With a passenger car density of only 225 cars per 1000 people, there is a huge need for catching up.”

    Well, he would say that wouldn’t he?

    I’m sure that Big Tobacco think that Africa could “catch up” on their smoking rate too.

    Those who fantasize about bicycles and straw hats should buy a ticket to China. Or live forever in ignorance.

    Yup, that ALWAYS seems to be the “come back” to those of us that dare to question car adoption in China or India (or anywhere really). Somehow we want them to “suffer” the “deprivation” of not having cars.

    There are other ways to live; maybe Europe and the USA are the ones making the mistake.

    BTW, welcome back.

  • avatar

    Autosavant:

    I am surprised that Russia, with all its low standard of living and poor health and low life expectancy and all that, already has 225 cars per person. I bet most are worthless beaters and cheapo, primitive Ladas and other domestics.

    Sorry, wrong again. Most of Russia’s cars are shiny new imports, so many that Russia had to put high import tariffs on cars to prop up their domestic industry. Just like in China, there are not many old beaters around, simply because the market had just begun to boom recently. In Russia and China, the fleet is much younger than in the USA and Europe. People who buy a car in China usually buy new.

    As for the great metro systems, sadly, the metro systems in the tier one cities are lagging behind, and are non-existent in the tier two and three cities (which have huge populations by comparison with the West.)

    Beijing is building subway lines as fast as they can, but buses are still the mass transit of choice. Hence the rapid growth of cars.

  • avatar
    RetardedSparks

    Autosavant

    Energy will become more expensive is all I said, and that will impact vehicle demand.

  • avatar

    PeteMoran:

    30 years? I’ve seen population estimates of between 1.75 to 2.25 BILLION in China alone by that time, so perhaps 1 BILLION cars????

    I don’t know where you are looking. Demographics don’t seem to be your strong suit. It’s quite simple to estimate population 30 years out. Just look at birth rates. According to United Nation estimates Chinese population size will remain relatively flat, with only a slight increase of maybe a hundred million over the next 40 years, a relaxation of the one child policy factored in. If two people can only have one child, that’s very negative growth. This is being carefully relaxed, and the population size is being carefully managed. BTW, the population sizes are approximations, the real number is estimated at around 1.5b now and 1.6b in 2050.

  • avatar
    Srynerson

    With nowhere near the environmental controls of the USA, a smaller land size (IIRC) ….

    Square area:

    United States: 9,631,418 sq km (3,717,727 sq mi)
    China: 9,596,960 sq km (3,704,426 sq mi)

    Just barely (and a lot of the square area of the United States is in Alaska – 1,717,854 sq km (663,268 sq mi) – so it doesn’t really count for purposes of your analysis)

  • avatar

    Srynerson: It’s even more alike. Just like in the U.S.A. most of the population in China is concentrated in the coastal regions, with large parts empty. Just that China has an East Coast only ….

  • avatar
    volvo

    “Does anyone know why Chinese Domestic Market is on overdrive right now? “

    Hope and Change for a prosperous future?
    Emphasis on economic growth rather than economic restrictions?

    IMO China identifies what needs to be done and does it. Not a lot of worries (beyond lip service) about political sensibilities and collateral damage. They will pursue China’s interests not those of of “international community”.

    Kind of like England prior to the 1930s and the US prior to the 1960s.

    I’ve heard it said that life is an education and hunger is the teacher. China is hungry right now while the US and Western Europe are relatively comfortable and complacent.

    I for one hope they are successful. For my great grandchildren’s sake I also hope that their colonial policies are as benign as the US policies were.

  • avatar
    PeteMoran

    @ BS

    Demographics don’t seem to be your strong suit ….. If two people can only have one child, that’s very negative growth.

    Nor yours by that statement. Did you forget the mortality rate?

    Li Honggui of the Demographic Society of China (a sort-of Government agency) suggests 2050 population of between 1.8b to 2b allowing for improvement in mortality as well, and under reporting of the current population (perhaps by as much as 200-300m). Estimates vary from 1.4b to 1.6b, with some I have read now openly working with a 1.5b figure.

    (No-one uses the 1998 UN population estimates anymore – they were between 10-15% out).

    No doubt Chinese population growth will flatten off, and the population will age almost certainly to slowly fall. China is taking steps to change the birth rate as you say, relaxing the one child policy, but also trying to learn the lessons from Japan’s aging population.

  • avatar
    Autosavant

    ” Bertel Schmitt :
    October 14th, 2009 at 10:35 am

    Autosavant:

    I am surprised that Russia, with all its low standard of living and poor health and low life expectancy and all that, already has 225 cars per person. I bet most are worthless beaters and cheapo, primitive Ladas and other domestics.

    Sorry, wrong again.”

    Warum “again”, Herr Schmitt?? Where was I wrong before?

    ” Most of Russia’s cars are shiny new imports, so many that Russia had to put high import tariffs on cars to prop up their domestic industry.”

    Do you have the numbers? And a lowly Dacia Logan is also a “shiny new import”, but it is just as bad a POS as a Lada. You should be careful so that people do not read the above to mean that most Russia’s cars are top of the line Mercs and BMWs and even VWs. Please give us a link with the detailed sales breakdown.

    ” Just like in China, there are not many old beaters around, simply because the market had just begun to boom recently. ”

    Russia and China could not be more different. Russia made some $ exporting oil in 2008, but is in deep tropuble in 2009. CHina keeps developing like crazy, IMporting oil and exporting far more valuable finished products.

  • avatar
    Daniel J. Stern

    @Autosavant:
    Most large cities in China have fantastic Metros and other mass transit.

    Mm. So did most large cities in America before automobile interests took firm root (and control).

  • avatar
    YZS

    Russia’s population is only 140M (July 2008 estimate, CIA world fact book), about half of the US population. While their country is much larger than China or the US. So way lower population density and more roads to travel on (and more area to travel through), makes higher cars per capita much easier to swallow.

    I can’t speak for the newness of their cars, but they are a resource rich country. Also, the infrastructure is such that a car is not a necessity. In those circumstances, people generally do not buy beaters just so they have something nice to get them around.

  • avatar
    ohsnapback

    What’s the average transaction price for a new sled in China, anyways?

    $3,500? $4,500?

    I do know that GMs Wuling sells a ton of minivans for about $3,600.

    I wish someone would aggregate sales based on real money paid, rather than by units.

  • avatar
    YZS

    Oh also, Oct auto sales will be even higher. 60th birthday is a big deal in China, and the general population is fairly happy with the motherland right now. A big chunk of car buying will be first time buyers that have been rising up through the economic ranks for a while that just never thought they needed a car (and don’t). They already have a house and probably even bought one for their parents.

    All the pomp and circumstances are making them feel pretty good about China and themselves, and now they want to show off their success even more than before and what better way to tell your friends and total strangers that you’ve made it than to buy a Buick (it’s a China thing) or a BMW?

  • avatar
    skor

    Chicks dig guys who know the definition for “prandtl-glauert singularity”.

  • avatar
    Da Coyote

    Hmmmm, concerning that pic… external tanks and breaking mach? Don’t think so…at least not with those tanks.

  • avatar

    What’s the average transaction price for a new sled in China, anyways?

    Anywhere between $6000 for a QQ to $3.6m for a Veyron.

    • 0 avatar
      China Transaction Price

      Can anyone provide a source for the AVERAGE TRANSACTION PRICE of a new car in China?

      I’ve heard $6,000 but I am unable to find verifiable documentation.

      Thanks!

  • avatar
    Autosavant

    “skor :
    October 14th, 2009 at 1:10 pm

    Chicks dig guys who know the definition for “prandtl-glauert singularity”.”

    The Q is, how much do guys dig chicks who know the above definition?

    Which implies, what do chicks that know the above definition look like?

    a. Suzie Orman
    b. Rosie O’Donnell
    c. A gorgeous Playboy Playmate, like in most depictions of female scientists that save humanity from total extinction, in Hollywood movies.

    Take a wild guess!

  • avatar
    DearS

    Ah, and GM just got billions of free cash. I’m feeling some anger, sadness and fear right now.

  • avatar
    addd

    ” Most of Russia’s cars are shiny new imports, so many that Russia had to put high import tariffs on cars to prop up their domestic industry.”

    Do you have the numbers?

    Here they come. AvtoVAZ (Lada) indeed has about 25% market with GM and VW following closely behind:

    http://www.aebrus.ru/application/views/FCKEditor/files/FCKEDITOR/file/AEB_pr_3q_09_eng.pdf

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