Business / Motoring Opinion

No reining in Chinese vehicle firms

By Andrew Thomson (China Daily) Updated: 2014-03-04 07:59

A carmaker's promotion event in Guangzhou. Auto sales growth in China helped virtually every major manufacturer achieve record sales. Provided to China Daily

China's car industry looks a sure bet to be a winner in the Year of the Horse.

Growth rates may not quite match those of 2013, whose 16 percent jump in sales surprised most observers, but total volumes should still rise by around 10 percent to a whisker under 20 million units.

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In the process, it will widen the gap on the world's second-largest market, that of the US, to around four million vehicles – a gap that will grow inexorably. Moreover, while the US will finally recover to its pre-global financial crisis sales level, China's total will be more than three times that of 2008 – a tribute to the extraordinary advance its auto industry has made in a period while most of the rest world – and the entire developed world – has been stagnating.

Last year's growth helped virtually every major car maker in China achieve record sales. The standout performance was Ford's, with a more than 50 percent rise in sales to 935,000 units, as it launched a slew of new models, including popular SUVs. But Japan's big three car makers – Toyota, Honda and Nissan – also had a good year, recovering from a sharp drop in sales during 2012.

The leaders, however, remain GM, with total vehicle sales of 3.16 million units last year, up 11.4 percent, and its long-time rival, Volkswagen, which for the first time in nearly a decade reclaimed its crown as China's top auto maker with total sales of 3.19 million units. South Korea's Hyundai held on to third place, with sales of just over one million.

Barring unexpected political or economic turbulence, all these companies should set further record highs in 2014. Measures aimed at curbing pollution and congestion via license plate quotas will impact sales volumes in some of China's richer cities, but the decline in these locations will largely be offset by the fast-growing rise in demand coming from inland and lower tier cities.