Western China to drive new phase of car sales growth


FRANKFURT, Aug 31 (Reuters) - China's automobile production will grow at an annual rate of 9.3 percent over the next few years, doubling in size by 2017, thanks to a burgeoning middle class in the outlying regions, a study showed.

PricewaterhouseCoopers said 27 million vehicles will be built in China in 2017 as demand for cars picks up outside of the wealthy coastal region in so-called Tier 3 cities where average disposable income last year surpassed 40,000 yuan ($6,269.101) -- roughly the cost of a small car.

About 130 cities in China already count more than 1 million inhabitants, with that number growing to 220 by 2025, providing an ever growing source of fresh customers looking to purchase their very first car.

"The German auto makers, especially the premium manufacturers, are very well positioned today in China," PwC European automotive leader Felix Kuhnert told Reuters Insider Deutschland on Wednesday.

"Their share of the luxury market amounts to 78 percent and we believe the German auto makers can defend this with the right measures and participate considerably in the future growth."

Premium car makers like Volkswagen's Audi, BMW or Daimler's Mercedes-Benz can look forward to 1 million Chinese with a net worth of over $1 million By 2015.

Kuhnert said Mercedes-Benz, Audi, Volkswagen and BMW would increase their local production in the country by 50 percent to 3 million vehicles by 2017.

"We expect that the Chinese consumer will change their consumption behaviour very quickly. For example hatchbacks, coupes and estates are no longer no-go's, so they have become very open-minded and appear to be assimilating certain western tastes particularly in the eastern coastal region," Kuhnert said during the interview.

In order to remain in touch with the changing consumption patterns, car makers are going to have to set up more and more research and design centers to meet the more demanding tastes of Chinese customers. ($1 = 6.381 Chinese Yuan) ($1 = 0.693 Euros) (Reporting by Christiaan Hetzner and Eva Kuehnen; Editing by Jon Loades-Carter)



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