That was quick: China overtakes U.S.A. as top car market
#1
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Chinese car market overtakes that of United States
By ELAINE KURTENBACH and DEE-ANN DURBIN (AP) – 3 days ago
SHANGHAI — China has overtaken the U.S. as the world's biggest market for automobiles, the first time any other country has bought more vehicles than the nation that produced Henry Ford, the Cadillac and the minivan.
Now that the Chinese buy more cars and trucks than Americans, the shift could produce ripples for the environment, gas prices and even the kinds of cars automakers design.
More than 12.7 million cars and trucks will be sold in China this year, up 44 percent from the previous year and surpassing the 10.3 million forecast in the U.S., according to J.D. Power and Associates.
China has long been expected to overtake the U.S. since its population of 1.3 billion is more than quadruple that of the United States. But the increase in sales happened much faster than anyone expected because of China's tax cuts, its stimulus program and a depressed American market.
Two years ago, J.D. Power predicted China would pass the U.S. in 2025. Earlier this year, it forecast 2009 sales of just 9 million vehicles for China.
After a sharp slowdown in auto sales late last year, the Chinese government cut taxes on small cars and spent $730 million on subsidies to encourage sales of SUVs, pickups and minivans. A big stimulus program also boosted truck sales by pumping money into construction.
Auto sales were expected to rise with China's stimulus, but they have far exceeded expectations, said Jeff Schuster, J.D. Power's executive director of automotive forecasting.
Most experts think the top-sales title will shift back and forth between China and the United States for the next several years, with China ultimately prevailing.
Improving sales of autos and other big-ticket items is key to Beijing's strategy to promote stronger domestic consumption and lower dependence on exports.
"The government has sent a very clear message that they will not let the auto industry weaken, especially in 2010," say Jia Xinguang, chief analyst at China National Automotive Industry Consulting & Developing Corp.
Meanwhile, U.S. sales hit a 26-year low in early 2009 and remain well below the 17 million average from earlier this decade.
China's growing auto market is sure to affect the industry worldwide. Some key factors are:
_ CHINA'S CAR POLLUTION: It's gotten worse. China's fleet is newer, and big cities have imposed emissions standards that exceed those in the U.S., but lax enforcement of standards is a major problem. Vehicles may meet standards at first but then degrade over time.
On top of that, the number of vehicles on China's roads is soaring, although it's still a fraction of the U.S.
_ FUEL DEMAND: Global demand for oil is rising, fueled by China and India. Most energy experts agree that demand for crude has peaked in the U.S. Meanwhile, China's demand for oil used in transportation could more than double between 2007 and 2020, according to the World Energy Outlook, a joint study by the Organization for Economic Cooperation and Development and the International Energy Agency.
At home, China struggles both with the amount and quality of its fuel supply. A study by Harvard researchers found that refiners were not supplying fuel that was good enough to meet the country's rising emissions standards.
The cost of oil is prompting China to encourage a shift to cars and trucks that are more fuel efficient or run on batteries and alternative fuels. The government has raised taxes on gas guzzlers. China is the world's No. 3 net importer after the U.S. and Japan.
_ VEHICLE DESIGN: The Chinese will have more influence over vehicle design as they buy more cars. GM had its Chinese team design the 2010 Buick LaCrosse because the brand sells better in China than in the U.S. Buick is considered a luxury car in China.
The designers included sumptuous back seats for executives with drivers. They also used Feng shui principles and swooping designs based on Chinese art.
Chinese automakers will emerge stronger from the sales boom. BYD Co. aims to overtake Toyota as the global auto leader by 2030. Among BYD's backers is billionaire investor Warren Buffett.
China's sales may grow so large that cars designed for Chinese tastes are sold globally, the way U.S. vehicles are now. But some experts doubt that will happen until Chinese automakers become competitive on style and quality.
Meanwhile, as China's middle class expands, Chinese car shoppers are developing tastes similar to those of drivers in the U.S. and other wealthy nations.
"I talk to my friends in Beijing," says Crystal Jiang, a professor at Bryant University in Smithfield, R.I., who studies globalization. "I drive a Subaru, they also drive a Subaru."
By ELAINE KURTENBACH and DEE-ANN DURBIN (AP) – 3 days ago
SHANGHAI — China has overtaken the U.S. as the world's biggest market for automobiles, the first time any other country has bought more vehicles than the nation that produced Henry Ford, the Cadillac and the minivan.
Now that the Chinese buy more cars and trucks than Americans, the shift could produce ripples for the environment, gas prices and even the kinds of cars automakers design.
More than 12.7 million cars and trucks will be sold in China this year, up 44 percent from the previous year and surpassing the 10.3 million forecast in the U.S., according to J.D. Power and Associates.
China has long been expected to overtake the U.S. since its population of 1.3 billion is more than quadruple that of the United States. But the increase in sales happened much faster than anyone expected because of China's tax cuts, its stimulus program and a depressed American market.
Two years ago, J.D. Power predicted China would pass the U.S. in 2025. Earlier this year, it forecast 2009 sales of just 9 million vehicles for China.
After a sharp slowdown in auto sales late last year, the Chinese government cut taxes on small cars and spent $730 million on subsidies to encourage sales of SUVs, pickups and minivans. A big stimulus program also boosted truck sales by pumping money into construction.
Auto sales were expected to rise with China's stimulus, but they have far exceeded expectations, said Jeff Schuster, J.D. Power's executive director of automotive forecasting.
Most experts think the top-sales title will shift back and forth between China and the United States for the next several years, with China ultimately prevailing.
Improving sales of autos and other big-ticket items is key to Beijing's strategy to promote stronger domestic consumption and lower dependence on exports.
"The government has sent a very clear message that they will not let the auto industry weaken, especially in 2010," say Jia Xinguang, chief analyst at China National Automotive Industry Consulting & Developing Corp.
Meanwhile, U.S. sales hit a 26-year low in early 2009 and remain well below the 17 million average from earlier this decade.
China's growing auto market is sure to affect the industry worldwide. Some key factors are:
_ CHINA'S CAR POLLUTION: It's gotten worse. China's fleet is newer, and big cities have imposed emissions standards that exceed those in the U.S., but lax enforcement of standards is a major problem. Vehicles may meet standards at first but then degrade over time.
On top of that, the number of vehicles on China's roads is soaring, although it's still a fraction of the U.S.
_ FUEL DEMAND: Global demand for oil is rising, fueled by China and India. Most energy experts agree that demand for crude has peaked in the U.S. Meanwhile, China's demand for oil used in transportation could more than double between 2007 and 2020, according to the World Energy Outlook, a joint study by the Organization for Economic Cooperation and Development and the International Energy Agency.
At home, China struggles both with the amount and quality of its fuel supply. A study by Harvard researchers found that refiners were not supplying fuel that was good enough to meet the country's rising emissions standards.
The cost of oil is prompting China to encourage a shift to cars and trucks that are more fuel efficient or run on batteries and alternative fuels. The government has raised taxes on gas guzzlers. China is the world's No. 3 net importer after the U.S. and Japan.
_ VEHICLE DESIGN: The Chinese will have more influence over vehicle design as they buy more cars. GM had its Chinese team design the 2010 Buick LaCrosse because the brand sells better in China than in the U.S. Buick is considered a luxury car in China.
The designers included sumptuous back seats for executives with drivers. They also used Feng shui principles and swooping designs based on Chinese art.
Chinese automakers will emerge stronger from the sales boom. BYD Co. aims to overtake Toyota as the global auto leader by 2030. Among BYD's backers is billionaire investor Warren Buffett.
China's sales may grow so large that cars designed for Chinese tastes are sold globally, the way U.S. vehicles are now. But some experts doubt that will happen until Chinese automakers become competitive on style and quality.
Meanwhile, as China's middle class expands, Chinese car shoppers are developing tastes similar to those of drivers in the U.S. and other wealthy nations.
"I talk to my friends in Beijing," says Crystal Jiang, a professor at Bryant University in Smithfield, R.I., who studies globalization. "I drive a Subaru, they also drive a Subaru."
#2
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The problem in China, now that all these cars are being sold, is going to be adequately training drivers. Many of them, coming from a bicycle culture, have little conception of the energy and impact force involved in a auto crash....the accident/death rate is much higher than in the U.S. In additon to that (from what I have read, as I have not been there to actually see for myself) is that some Chinese drivers do things that would be considered insane in the U.S., such as doing a U-Turn on a freeway ramp if they take the wrong one, and driving back the other way into oncoming traffic.
#3
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The US could also benefit from adequately trained drivers, but that has little to do with the topic as posted by OP.
Having actually been to China, I do have some knowledge of the car culture growth in China.
Having actually been to China, I do have some knowledge of the car culture growth in China.
#4
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that headline needs to put more disclaimers.
the china market is huge because our market is already way way way saturated.
they have a relatively new market that is nowhere near what ours is in terms of car ownership per person.
that and they have 5x the amount of people we do. A little common sense in that article goes a long way, but great heads up nonetheless.
This is america's chance to make some serious money.
thanks mp
the china market is huge because our market is already way way way saturated.
they have a relatively new market that is nowhere near what ours is in terms of car ownership per person.
that and they have 5x the amount of people we do. A little common sense in that article goes a long way, but great heads up nonetheless.
This is america's chance to make some serious money.
thanks mp
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#5
Lexus Test Driver
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That’s article comes as no surprise, many predict China to take over the #1 spot next year, but it happen a bit earlier. There are many problem with China automotive explosion, way too many to discuss here on this board, but the Chinese government really need to deal with this right now or they will be force the limit the amount of cars on the road, which means higher taxes for car and a decrease in car sales.
#6
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China's official road accident death toll is a little over 100,000 per year recently. The real figure may be higher, and China is on a public transit (and HSR) shopping spree to try to stem car culture in major cities and on intercity trunk highways.
Although roads are now dominated by cars, which can make the street scene resemble that of, say, France, driver behavior can still be rather astonishing. I do frequent the Chinese mainland, and things like shortcutting through the opposing lanes on a rapidly moving 8-lane boulevard to get to a parking lot are not uncommon.
Although roads are now dominated by cars, which can make the street scene resemble that of, say, France, driver behavior can still be rather astonishing. I do frequent the Chinese mainland, and things like shortcutting through the opposing lanes on a rapidly moving 8-lane boulevard to get to a parking lot are not uncommon.
Last edited by superchan7; 12-14-09 at 11:01 AM.
#7
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that headline needs to put more disclaimers.
the china market is huge because our market is already way way way saturated.
they have a relatively new market that is nowhere near what ours is in terms of car ownership per person.
that and they have 5x the amount of people we do. A little common sense in that article goes a long way, but great heads up nonetheless.
This is america's chance to make some serious money.
thanks mp![Thumb Up](https://www.clublexus.com/forums/images/smilies/thumbsup.gif)
the china market is huge because our market is already way way way saturated.
they have a relatively new market that is nowhere near what ours is in terms of car ownership per person.
that and they have 5x the amount of people we do. A little common sense in that article goes a long way, but great heads up nonetheless.
This is america's chance to make some serious money.
thanks mp
![Thumb Up](https://www.clublexus.com/forums/images/smilies/thumbsup.gif)
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#8
Lexus Fanatic
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Sorry about that; the way I explained it, in the last post, is indeed a little off-topic......I could have rephrased it a little better. The point I was making is that is I think that the huge increase in Chinese-car sales might not keep on if the accident/injury/death rate doesn't start to come down. Chinese insurance companies might not be willing to take on new drivers. Some cars would still be sold, of course, and driven without insurance, but, that is a risky buisness, especially in a non-free society like China, with a very strong police force.
#9
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Sorry about that; the way I explained it, in the last post, is indeed a little off-topic......I could have rephrased it a little better. The point I was making is that is I think that the huge increase in Chinese-car sales might not keep on if the accident/injury/death rate doesn't start to come down. Chinese insurance companies might not be willing to take on new drivers. Some cars would still be sold, of course, and driven without insurance, but, that is a risky buisness, especially in a non-free society like China, with a very strong police force.
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#10
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From a business standpoint, as it was pointed out above, the Chinese market is very different from the mature market in the US. Filling the pipeline versus replacement is part of what's going on.
#11
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OK, fine. I brought it up because insurance and law enforcement are two of the factors that can affect car sales. But I'll drop it.
#12
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Keep in mind that China has a growing middle class that is approximately the size of the U.S. population right now. That's over 300 million people who basically afford anything a middle-class American family can.
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#15
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Sorry about that; the way I explained it, in the last post, is indeed a little off-topic......I could have rephrased it a little better. The point I was making is that is I think that the huge increase in Chinese-car sales might not keep on if the accident/injury/death rate doesn't start to come down. Chinese insurance companies might not be willing to take on new drivers. Some cars would still be sold, of course, and driven without insurance, but, that is a risky buisness, especially in a non-free society like China, with a very strong police force.