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Archive for January, 2008
Saturday, January 26th, 2008
Saturday, January 26th, 2008
The Chinese car market has shot into leadership, becoming the world’s largest car market. According to General Motors, in January 2009 Chinese consumers bought some 790,000 cars. According to Autodata analysts, over the same period US consumers bought less than 657,000 cars. In the face of the global economic crisis, such Chinese makers as Shuanghuan and Great Wall are forced to resort to job cuts. Quite probably, some of the companies will be taken over by larger peers. This will enable Chinese markers to compete more successfully with the developed countries that are experiencing the same problems.
Consolidation is advantageous to foreign car makers, such as Volkswagen and Toyota. Currently, competition among multiple local car markers keeps prices at a lower level. Yet it also plays in the hand of the larger Chinese markets, such as Chery and BYD. The Chinese car market currently has over 80 car makers. Many of them are accused of making replicas of leading international brands.
The Chinese market has grown mainly thanks to domestic demand for passenger cars, which has been rising at an annual rate of 20% over the last 10 years.
In the fall of 2008, car sales started to decline, down 11.6% in December year-over-year. In 2008, the Chinese car market grew by a mere 7.3%. Growth is expected to slow further still this year. Chinese car sales are even expected to go into negative territory.
