Auto Execs In Guangzhou: China Will Grow Further, But Slower

Bertel Schmitt
by Bertel Schmitt

China’s car sales can’t go on forever growing at a 50 percent to sometimes 100 percent clip, auto execs agree at the Guangzhou auto show. All are convinced that the growth will continue next year at a more – what’s the buzzword?- sustainable rate.

The Guangzhou auto show opened today. In case you’ve never heard of Guangzhou, it is a city of around 10m (nobody knows for sure,) and the main manufacturing hub of the Pearl River delta. Formerly known as Canton. About 30 percent of China’s GDP is produced in the South. The opening of the show prompted some major announcements. Here are some of them:

GM China expects its sales to rise by 50 percent in China this year, Kevin Wale said to Reuters. From January to November, GM China sold 1.5m units. GM should close out the year anywhere between 1.6m and 1.7m units sold. For 2010, Wale is cautious, he sees a growth of only 10 to 15 percent. Which nonetheless should bring GM China close to the 2m mark next year. In any case, Wale is flexible. “We’ve been changing the full-year forecast every month.” Next year, China could be GM’s biggest market.

Toyota doesn’t see much of a slowdown next year. Because their growth in China is pretty anemic this year. Toyota’s China sales should rise about 17 percent to 700,000 vehicles this year from 600,000 in 2008. Shame on you, Toyota, that’s grossly under-performing the market. Next year? Sales growth is expected to slow to about 14 percent in 2010, with the company aiming to sell about 800,000 vehicles in China. Said Toyota’s Masahiro Kato to Reuters, before he continued his nap.

Volkswagen’s Vahland announced lofty goals, but few concrete plans. Especially no concrete as in building a new factory in the South. That announcement was widely expected. Vahland disappointed. He said his company plans to more than triple its sales in south China by 2018, and wants to double sales to 2 million units by that time. Nothing about a new factory, noting about SEAT coming to China.

Daimler AG’s Mercedes-Benz expects China to surpass the U.K. as its third-biggest market next year. Chinese auto sales will like rise by as much as 15 percent next year, Mercedes-Benz China head Klaus Maier said at the Guangzhou show to Bloomberg. The automaker’s China sales this year will probably rise 65 percent to 65,000 cars, he said.

Nissan targets 20 percent growth f or next year and plans to boost its China sales next year to 600,000 units. However, they only have capacity for 500,000 vehicles.

All makers seem to agree that the Chinese auto market will grow by “only” 15 percent or thereabouts next year. Most auto markets in the world would happily take 15 percent. In China, 15 percent more would mean around 14m units sold be end of 2010. Most likely, it will be more. China’s Geely thinks so. They are planning for 20 to 30 percent growth.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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