China's Passenger Car Sales Keep On Sliding
Motor Vehicles June 28, 2015
From 2007 to 2014, China's passenger car production expanded to 19.9 million units, rising with a CAGR of 18%. Due to a cooling economy, though, China's new-automobile market is caught in a vicious cycle of consumers tightening their belts and vehicles flooding the market.
In April 2015, decreasing or stagnant sales were announced by several big car makers in China, where competition keeps intensifying amid a slowing domestic economy. At the beginning of 2015, overseas car makers sold 3 million passenger vehicles in China, only a 1% gain compared with 2014. Sales of Ford Motor Company, for example, stood at 96,889 vehicles in China, only 60 more vehicles than in April 2014; Nissan Motor Company's sales, meanwhile, dropped by 19% to 95,500 vehicles.
By contrast, some Chinese domestic manufacturers displayed robust annual growth. For the first two months of this year, Geely Automobile Holdings Ltd. registered a 77% boost in car sales, while Great Wall Motor Company showed a 22% rise in sales of sedans and crossovers.
The government of China encourages foreign car makers to operate joint ventures to manufacture locally. The majority of overseas car companies reap substantial dividends after establishing partnerships with large state-owned auto groups.
In 2014, Iran (20%), Russia (12%), Egypt (7%), Colombia (7%) and Chile (6%) were the leading destinations of China's passenger car exports, together making up 53% of total exports in physical terms. While the share of Iran increased significantly, the share of Russia illustrated negative dynamics. The shares of the other countries remained relatively stable throughout the analyzed period.
In 2014, Japan, the U.S. and Germany were the main suppliers of passenger cars into China with a combined share of 61% of total imports. However, the fastest growing suppliers from 2007 to 2014 were Belgium (+51% per year), Mexico (+46% per year) and the UK (+46% per year).
Source: China: Cars - Market Report. Analysis And Forecast To 2020
