17 Million Cars A Year In China? Forget About It

Bertel Schmitt
by Bertel Schmitt

People have accused me of irrational exuberance (or worse) when I mentioned that the Chinese auto market could be 17 million or thereabouts this year. Impending bubbles were predicted. Popping bubbles were (erroneously) reported. Gordon Chang, guest of Glenn Beck whenever Beck needs an Asian that says something nasty about China, even offered the theory that the Chinese government secretly buys most of the cars and hides them somewhere. (For 17 million, the Gobi desert would come in handy, but then there’s Google maps.) I stuck by my prediction of 17m or thereabouts.

Well, it turns out I was wrong after all.

J.D. Power, echoed by Automotive News [sub], now predicts that auto sales in China (all vehicles, they don’t have the “light vehicle” category) will grow more than 30 percent to 18 million units this year.

It sure looks that way.

In October, sales were up 27.1 percent for the month. For the first ten months, auto sales had risen 34.76 percent to 14.68m units and production was up 34.49 percent to 14.62m.

J.D.Power calculated the October SAAR for China (which they don’t have, be careful with that word, they might think it’s SARS) at 19.2 million units.

J.D. Power sees the same trend we reported weeks ago: The Chinese government keeps its people guessing as to what will happen with car taxes and other incentives in the new year. Many Chinese decide to lock in the handouts this year instead of hoping for an uncertain future.

China already stepped on the brakes to avoid an overheating of the economy. Therefore the thinking is that the handouts will end in the new year. Which has the reverse effect of further overheating the economy as people mob the showrooms.

If J.D.Power’s projection will come true, then a world record will be broken. The U.S. had sold more than 17 million cars in the beginning of the millennium, but never more than 18 million. Currently, the U.S. is seen to close out the year with sales of 11.5 million.

In 2011 and beyond, J.D. Power expects China’s auto market “will grow at a somewhat lower rate than in 2009 and 2010.” Now that’s a precise prediction! My gut says it will be somewhere between 10-15 percent. Why? Because the Chinese get nervous when growth dips below 10 percent. And mostly because China has a vehicle density of only 63 per thousand (U.S.: 800 per thousand.) Lots and lots of room to grow in a country wil a population of 1.3 billion (which will mostl likely turn out to be 1.5 billion when they are done counting thise year’s census.)

Run the numbers: At just 15 percent growth, it will be 21 million cars next year and 36 million a year in 2015. That should be enough to make those happy who had the foresight to enter the Chinese market. GM comes to mind. And speaking of GM, GM China’s CEO Kevin Wale agrees and also predicts 10 to 15 percent growth for next year.

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  • George B George B on Nov 27, 2010

    HoldenSSVSE, as of 2003 it's possible to get money out of the equity of your house in Texas. http://www.occc.state.tx.us/pages/brochures/home_equity_lending.html#line However, you can't take out a loan for more than 80% of your home equity and you can't refinance more often than once per year. In Texas home prices are the sum of the cost of land, building materials, and Mexican labor with no shortages of any of these inputs. The supply of houses grows easily to meet demand, preventing insane price increases. Also helps that the population of Texas increases by about 1300 people per day, so the demand for houses has been relatively steady.

  • MattfromOz MattfromOz on Nov 29, 2010

    Funny also to see that some of the best-selling cars in China are completely unknown to us are they are sold only there. For example, the VW Lavida (?) is the best seller in October and sold more units last month in China than Honda sold Accords in the US... (23,180 vs. 21,451) OR that GM's best selling passenger car in China (the Buick Excelle - 21,492 units in October) sold nearly double the amount if GM's best selling passenger car in the US! (Chevrolet Impala - 12,389) and still, this is not counting the Buick Rxcelle hatchback version which sold 11,487 units in China, bringing the Excelle total to 32,979...nearly 3 times the sales of the Impala in the US... Another one: despite its huge success in the US, Hyundai's best selling model there, the Sonata, sold less units (17,505 last month) than Hyundai's best selling model in China: the Hyundai Elantra Yuedong at 18,775... Fun stuff! The top 75 models sold in China on the below link if you are interested... (also with a photo of the VW Lavida!) cheers Matt bestsellingcars.com

  • 28-Cars-Later Somebody had Mark VIII wheels for sale on CL, I should see if they are still up there for a future Mark VII (my own or someone else's that's worthy). Geez I need a bigger house.
  • 28-Cars-Later This being ostensibly a Cali car, the juice may be worth the squeeze for the more intense Bimmer people but otherwise seems high. Spend more and get one in the right configuration and better shape. Unless you have a motor and the know how, but the time you fix the stupid in this its going to cost just as much... if this was a 'vert maybe but m'eh.
  • Lou_BC I kinda like the blocky lines. The snout has a star wars stormtrooper look so that means it won't hit anything.
  • ToolGuy I respect the work this individual has done from the starting point he was handed ("I have been involved for about 6 months repairing this car acquired form my sister who received it from our dad"; "The car was an oily mess when I received it, had a clogged catalytic converter, and hesitated intermittently on the highway after extended driving (> 20 miles)")...But there is no need to show prospective customers the "before" or "in process" photographs. Very few customers want to see or know how the sausage is made.And rather than show extreme close-ups of the dents, call a PDR shop, and bump up your selling price.
  • Ajla "launched as the GX550 offering a 3.4-liter" I know some people rip on pick up or performance car buyers for insecurity but it is funny that premium vehicle buyers need inflated designations like this because "GX340t" won't get their d*cks hard. Although Lexus isn't alone in this, it's even better here because they went from GX470 to GX460 back in 2009 and no one died over the decrease. The IS500 and LC500 are still matched to their displacement but maybe they'd sell more if it was called LC650? 🤔