What is in this article?:
- Automakers, Suppliers Confident China to Remain on Strong Growth Track
- Tier 2, 3 Cities Expected to Drive Sales for GM
and GM are among those looking to expand their sales networks in the country and add models to their product portfolios. Most forecasts call for sales to rise 7%-10% in 2014.
Economy Baojan brand counted on to appeal to buyers in smaller cities.
BEIJING – The Western media is full of doom and gloom stories about China’s economic slowdown and how that will impact sales in the world’s largest vehicle market.
Stories also dwell on the potential negative impact of policies such as restricting vehicle registration in some cities.
None of that pessimism was evident in China at the Beijing auto show. Automakers and suppliers remain high on the market, though they can’t quite agree on the size of its growth going forward.
“I am optimistic through 2020,” David Xu, executive vice president of(China) Investment, tells WardsAuto.
He sees China’s passenger-vehicle market growing 7% annually at least through the end of the decade. That will be driven by the current low rate of car ownership in China, Xu says.
Though China’s population tops 1.3 billion, only 60 people per 1,000 own a car, theexecutive points out, while the global average is 110 per 1,000.
More than 65% of buyers in China are first-time buyers, Xu says. In Tier 1 cities such as Beijing and Shanghai car ownership is common, but that is not the case in China’s inland cities, where the dream of car ownership is still strong.
“People at least once in their lives want to own a car,” Xu says, “and income keeps going up.”
Automakers are expanding their dealership networks and adding new models and even new brands to their China portfolios to reach consumers in those inland cities.
has pledged to launch 15 new or refreshed models here by 2015. It also will grow its Ford-brand dealership network from about 340 points now to 700 by 2015.
says it is making sure it understands the wants and needs of consumers in different parts of China. It expects the overall market to grow about 7.5% this year, a pace it is happy with.
“The rate it was growing in the past was not sustainable,” Ford China Chairman and CEO John Lawler says here.