World's largest market
GUANGZHOU, China — Automakers are forecasting strong China car sales in 2011 despite the end of some government incentives as the country’s second major auto show this year kicks off in the southern city of Guangzhou.
China overtook the United States in 2009 as the world’s biggest car market, with sales surging 45 percent to 13.6 million vehicles. Monthly sales this year have seen double-digit percentage growth and analysts are forecasting sales may climb roughly 30 percent to about 17 million vehicles for the full year.
Such explosive growth may not continue in 2011 because a tax cut on new vehicle purchases is expected to end. But a rebate of $450 on cars with small engines will stay in place, as the government seeks to encourage people to drive more fuel efficient vehicles.
“We think the fundamentals of growth in China are very strong,” said Kevin Wale, president and managing director for GM China, citing an economy that is expected to expand 8 percent or more annually, high consumer confidence and a global economy that is starting to rebound.
Unlike its glitzier cousins in Beijing and Shanghai, which are held in alternating years and are aimed more at establishing China’s presence globally with product launches, the Guangzhou show has always been aimed at local buyers.
But car makers are still putting on a show for the tens of thousands of potential buyers expected to pour into the eighth annual Guangzhou International Automobile Exhibition, in bustling Guangdong, one of China’s most prosperous provinces. The show, known as Auto Guangzhou, runs from today — its media day — through to Dec. 27.
By the time 2010 is over, Wale said, GM will have sold about 2.3 million cars in China, while next year sales will climb about 10 percent to more than 2.5 million.
Other automakers at the show were also optimistic that sales next year would be just as good as in 2010, brushing off the effect of the end of the incentives.
“I expect there will be a rush to buy cars before the tax goes up at the end of the year, then an adjustment period and then things go back to normal,” said Richard Baker, deputy general manager of Ford’s joint venture in China with Chang’an Automobile Group and Mazda.
Ford expects to sell 305,000 vehicles in 2010 through the joint venture, up 32 percent from a year earlier, Baker said.
For 2011, Ford expects that number to go up, but wouldn’t give a sales target.
