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Automobile industry

China's Auto Sales May Outstrip US for Third Consecutive Year

Strategic Insights

— 1 min read

China's auto sales growth is projected to reach 15% to 20 million units in 2011, surpassing the US market, according to estimates from major automakers Toyota, General Motors, and Volkswagen. Industry analysts and executives expect sales growth in China to continue, driven by a recovering economy and increasing demand for vehicles. Despite the expected growth, challenges such as capacity constraints and the phasing out of incentives are affecting the market.

Key Takeaways:

  • Auto sales in China may reach 20 million units in 2011, outpacing the US market, according to Booz & Co. and Nomura Holdings Inc. analysts.
  • Chinese passenger-car vehicle sales reached 12.45 million through November 2010, a 34% increase from the previous year.
  • Toyota, the world's largest automaker, expects its China sales to rise 13% to 900,000 vehicles in 2011.
  • Volkswagen's Soh Weiming, local executive president, expects the company's growth in China to be limited by a shortage of capacity.
  • General Motors, the largest foreign automaker in China, expects sales to grow as much as 15% in line with the wider market.
  • Local brands, such as Geely and Brilliance, are expected to account for more than 63% of new models sold in China.
  • Honda Motor Co. has launched its new brand Li Nian in China, while GM will sell its first car under the Baojun brand next year.

Statistics:

  • Estimated auto sales growth in China: 15% to 20 million units in 2011
  • Chinese passenger-car vehicle sales through November 2010: 12.45 million
  • Increase in Chinese passenger-car vehicle sales: 34%
  • Toyota's China sales in 2011: 900,000 vehicles
  • Expected growth rate for Volkswagen: 10% to 15%
  • Capacity shortage affecting Volkswagen: 2 years
  • Production capacity of Volkswagen: 3 million cars annually
  • Investment in China by Volkswagen: 10.6 billion euros by 2015

Sources:

  • Bloomberg News
  • Booz & Co.
  • Nomura Holdings Inc.
  • General Motors Co.
  • Volkswagen AG
  • Toyota Motor Corp.
  • Honda Motor Co.
  • Li Nian brand
  • China Association of Automobile Manufacturers
  • Toyota Executive Kevin Wale
  • Volkswagen Executive Soh Weiming
  • General Motors Executive Kevin Wale
  • Hyundai Motor Co. Executive Noh Jae-man

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