China Vehicle Sales Reach 22 million Units in 2013

First nation to report over 20 million units sold

Jan. 20 – China became the first country to sell in excess of 20 million auto units last year, with nearly 22 million passenger and commercial vehicles being sold in the country over that time. This figure represented a 14 percent increase over 2012, and was double the China Association of Automobile Manufacturers estimate. Of these, 59.7 percent of the market was taken by foreign joint ventures. Volkswagen replaced General Motors as the top China seller for the first time since 2003, while Ford sales grew by 49 percent and Japan’s Toyota enjoyed a record year, despite political problems with China.

China’s auto market still has plenty of growth however. Car ownership is still low in the country, with about 120 million vehicles on the roads in a country of 1.4 billion. That compares to less than 100 cars for every 1,000 people, far lower than markets such as Europe and Japan with penetration of 600 vehicles for every 1,000 people. Eight Chinese cities reported record sales despite curbs being introduced to restrict ownership, with many Chinese just buying anyway to best the restrictions.

“For those working in the auto industry, the only country they should know where sales are still robust is China,” said Hubertus Troska, president of Daimler China.

Auto ownership has become a political issue in China with some factions blaming the increasing pollution in cities on automobile exhaust fumes.  Thus, they belive that the problem can in part be explained away due to China’s growth in wealth. Others believe the pollution is caused by inefficient state owned coal and power supply companies, a far more direct criticism of the Government’s management of the country. This latter view has recently been put forward by Beijing’s Mayor who recently announced an “all-out effort” to fight air pollution.

The New Year is shaping up to be another strong year for the Chinese auto market.  Luxury car maker Jaguar Land Rover, owned by India’s Tata Group, is about to commence production at its new China factory in Changshu in a joint venture with Chinese car maker, Chery, later in the year.

“China’s market is an opportunity, but not an opportunity for everyone,” said Jia Xinguang, a Beijing-based auto analyst. Companies getting a late start in the Chinese market may find it difficult to catch up to their established peers, he further commented.

Vehicle sales in China are expected to rise a further 10 percent during 2014.

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