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Is China Boom About to Go Bust?

Sales pace tumbles – threatening industry plans.

by on Mar.09, 2011

The Chevy Volt on display at Shanghai's Expo 2010.

When Toyota President Akio Toyoda outlined his company’s new “Global Vision,” which calls for sales to grow 20%, to 10 million annually, China was expected to play a key role, eventually accounting for 15% of the maker’s worldwide volume. (Click Here for more.)

And Toyota isn’t alone.  Indeed, it’s hard to find a single manufacturer that isn’t betting on China, which is today the world’s largest new car market and which has posted growth, in recent years, that has at times approached triple digits.

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But could the boom ready to go bust?  With some analysts worrying about a bubble in the Chinese economy – and with some smog and traffic-snarled cities, notably including Beijing, taking steps to reduce vehicle sales – might car sales be peaking?  The latest numbers certainly raise some flags.

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Global Auto Market Heading for All-Time Record

Power predicts total 2011 demand will near 77 million.

by on Feb.16, 2011

Surging demand in China should help push global car sales to an all-time record in 2011, forecasts J.D. Power.

As if to underscore the increasing power of what was once derided as the “Third World,” and de-emphasize more established markets like the U.S., global auto sales will hit an all-time record this year, forecasts J.D. Power and Associates.

A total of 76.5 million vehicles will be sold around the world, the company predicts, up from the record 72 million mark hit just last year.

But while the slow U.S. recovery will certainly play a part, forecasters say the real driver behind the record trend is China, along with other emerging markets such as India and Brazil.

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Notably, for the first time, emerging automotive markets accounted for more than half of global light vehicle sales, in 2010, reported the consulting firm’s senior vice president John Humphry, “clearly signaling the shift of power in the global automotive market.”

While that momentum is expected to continue, however, the motor vehicle boom is occurring almost everywhere.

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GM Joint Venture Sales in China at All-Time High

If only the same applied elsewhere during a disastrous 2009.

by on Jan.04, 2010

GM is locked in a battle in China with Volkswagen Group for sales leadership.

General Motors Company and its joint ventures in China announced today that domestic sales of 1,826,424 units sold in 2009 resulted in a year-end market share record of 13.4%. It was an improvement of 1.3 percentage points from the end of 2008.

The results provided confirmation of sorts for taxpayer bailout defenders, including the U.S. Auto Treasury Task Force, which asserted that the insolvent company was worth saving last year because of its global footprint and ongoing success in Asia that currently eludes it elsewhere.

As the result of  a combination of a large population, ongoing Communist government investment in crucial transportation infrastructure projects, and extremely effective government stimulus programs during the Great Recession, the Chinese auto market is now the world’s largest. Chinese government policy also requires that automakers form partnerships with Chinese companies so that jobs and profits stay in China.

The U.S. is the only major industrial country in the world that does not have a policy to protect manufacturing jobs in any industry, let alone the auto industry where each car company job has a multiplier effect of 10:1 in the latest study from the respected Center for Auto Research.

GM is locked in a battle with Volkswagen Group and Toyota global for leadership, although VW – profitable and growing through acquisitions – seems to be in a better place right now than loss-making Toyota, as well as money losing GM, which as recently as two years ago was the global auto market leader. As of the end of the third quarter of 2009, VW was solidly in third place, with 4.8 million sales. Toyota reported 5.6 million, GM 5.5 million. Final sales results will not be in until much later this month.

Sales of Buick and Chevrolet vehicles were strong during a year, as were sales of joint venture models from SAIC-GM-Wuling. This positive result came  during a year that that most other automakers would rather forget or downplay, including GM when its slumping U.S. sales results are announced tomorrow.

“We are proud of our performance in 2009,” said Kevin Wale, President and Managing Director of the GM China Group.

In 2009, GM and its Chinese JVs introduced several new and upgraded models, including the new Buick LaCrosse and the New Regal turbo series, which will debut in the U.S. next summer; the Chevrolet Cruze delayed in the U.S. until next fall; and the new Cadillac SLS and SRX.

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中国 or zhōng guó!

GM and its joint ventures continued increased investment in China throughout the year as it contracted elsewhere.

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