Industryweek 5945 China Auto 1

China Auto Sales Up Nearly 14% in 2013

Jan. 9, 2014
China's huge auto market is critically important to foreign companies, which have looked to its vast potential to take up the slack from flagging sales in Europe, where French car sales hit a 15-year low in 2013 and German car sales also fell.

SHANGHAI -- China's auto sales smashed through the 20 million mark last year, growing nearly 14% and extending its lead as the world's biggest car market, an industry group said Thursday.

Sales in China, the world's biggest auto market since 2009, surged 13.9% to 21.98 million vehicles last year, the China Association of Automobile Manufacturers (CAAM) said, as a recovery in Japanese brands offset the impact of slowing economic growth.

Passenger vehicle sales jumped 15.7% year-on-year to 17.93 million units, the group said.

China's huge auto market is critically important to foreign companies, which have looked to its vast potential to take up the slack from flagging sales in Europe, where French car sales hit a 15-year low in 2013 and German car sales also fell.

In the United States, total auto sales rose 7.6%to 15.6 million vehicles in 2013, according to Autodata, their best annual performance in years.

In 2012, Chinese auto sales had risen just 4.3% annually to 19.31 million vehicles, hurt by slowing domestic economic growth, limits on car numbers imposed by some cities to cut pollution and congestion, and a territorial row between Beijing and Tokyo that hit sales of Japanese-brand cars.

China's economy -- already the world's second largest -- registered its worst growth rate for 13 years in 2012, expanding at an annual rate of 7.7%.

Growth probably slipped further in 2013 to 7.6%, state media reported in December, just above the government's annual target of 7.5%.

But Japanese brands have continued to recover from the downturn in 2012, when political tensions grew over disputed islands in the East China Sea, causing some consumers to shun their Asian neighbour's products.

"Although the economic situation was bad in 2013, there were many catalysts for the car industry," said Cui Dongshu, deputy secretary general of the China Passenger Car Association, another industry group.

"There was strong demand for replacing old vehicles with new ones. Japanese brands also rebounded after their downturn in 2012 as domestic consumers have high regard for them," he told AFP.

In its figures, CAAM said sales of Japanese-brand passenger cars amounted to 2.93 million in 2013, but gave no percentage change.

In December alone, total vehicle sales in China -- both passenger and commercial -- rose 17.9% year-on-year to 2.13 million units, CAAM said.

Some foreign companies have already announced record China sales in 2013. General Motors sold 3.16 million vehicles in the country last year, up 11.4% from 2012.

"GM maintained good growth momentum in our company's largest market, despite a modest slowdown in demand for commercial vehicles," said president of GM China, Matt Tsien.

Competitor Ford sold 935,813 vehicles in China last year, up 49% from 2012, as the company introduced more new vehicles to the market.

But analysts said auto sales could slow this year from 2013.

"Surging sales are expected to see a slowdown as government restrictions curbing new vehicle sales are enforced across cities in China, as the levels of pollution hit record highs," IHS Automotive senior analyst Namrita Chow said in a recent report. Last month, the northern city of Tianjin became the latest to limit cars by capping the number of licence plates it issues annually.

IHS forecasts passenger vehicle sales will rise around 10.4% this year.

Cui of the China Passenger Car Association forecasts vehicle sales will rise 10%-12% this year, as the one-off boost from the improvement for Japanese brands eases.

- Bill Savadove, AFP

Copyright Agence France-Presse, 2014

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