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Chinese Auto Market Grows to 40 Million Annually?

Annual vehicle sales to reach 30 million by the beginning of the next decade, 40 million at end. SAIC buys General Motors?

by on Jan.07, 2010

Big country, big population, big growth, and already the world's largest market.

The booming Chinese market will grow to 19 million units of annual sales by 2016, according to the experts from the global auto consultancy practice at PricewaterhouseCoopers.

That would make China the largest maker and consumer of vehicles in the more than 100-year history of the business.

Moreover, you ain’t seen nothin’ yet, at least according to some speculation by me and other sources.

If these pro-Chinese factions are right, the home market could reach 30 million units by 2020 or so, and barring a political upheaval – a genuine risk that virtually everybody acknowledges– it could grow to 40 million units by the end of that decade. Who knows?

This means that Chinese makers will be hard pressed to keep up with internal demand and most Chinese cars — except for maybe the odd few Geely or Chery models — will not be exported. Actually, given their current quality, I argue that  it would be better for established automakers if the Chinese did export large numbers of vehicles  right now. Remember the  Korean-built Hyundai Excel of the 1980s? It was so bad, except for the eastern European Yugo, that it set back Hyundai marketing in the U.S. for decades.

Many of the assumptions made about China are wrong, such as a coming Chinese export wave that enthralls media types and the opining classes, cautions Steve D’Arcy, a partner in PWC’s Global Automotive Practice.

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中国头号!

There will be no massive wave of exports emerging out of China because Chinese makers will barely be able to keep up with burgeoning demand. Hence the 19 million prediction for 2016. As Chinese annual income levels keep rising to equal an average vehicle price of 38,000 RMB or ~$5,600 for a basic car, D’Arcy sees now reason why China won’t remain the world’s largest auto market, he theorized at press luncheon in Detroit today.

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