Source: Bloomberg News | 2013-1-12 | NEWSPAPER EDITION
AUTO sales in China, including those of cars and buses, may accelerate this year and surpass 20 million units for the first time, spurred by a rebound in economic growth and urbanization.
Wholesale deliveries may gain 7 percent this year to 20.65 million units, led by demand for passenger vehicles, the China Association of Automobile Manufacturers said in a statement yesterday. Sales of sport-utility vehicles will remain the fastest-growing segment, while commercial vehicles will post a slight gain, according to the projections.
"A continuous and stable macro-economic policy will be good for the development of the vehicle market," the CAAM said. Vehicle demand will be supported by urbanization and there exists a big market potential for exports, the CAAM said.
While Chinese auto demand is forecast to accelerate this year, the pace of growth remains less than a quarter of the stimulus-led 32 percent rate in 2010, as cities including Beijing and Guangzhou curb new vehicles to cut smog and traffic jams. Competition for market share is poised to intensify as foreign automakers led by General Motors Co and Volkswagen AG step up their push into smaller cities traditionally dominated by local brands.
"Not everyone will be the winner but some of the automakers that invest previously in R&D will be," said Jeff Chung, Hong Kong-based analyst at Daiwa Securities Group Inc. "The automakers with the best product mix, best geographic mix will still enjoy very high growth rates."
Passenger vehicle sales may climb 8.5 percent to about 16.8 million units, the CAAM estimates, while commercial vehicle sales will probably rebound from last year's 5.5 percent fall to gain 1 percent to about 3.85 million units.
Auto sales in China rose 4.3 percent to 19.3 million units last year, missing official projections for deliveries of as much as 20 million made in July but a mild recovery from the 2.5 percent gain in 2011, the CAAM said. The 2012 sales made China remain the world's largest auto market for the fourth consecutive year.
The SUV segment was the only one that grew by double digits in China's auto market last year amid economic uncertainty.
The deliveries of SUVs in China surged 25.5 percent to 2 million units last year, accounting for 13 percent of the country's passenger car sales and more than 15 times the sales 10 years ago when the SUV craze began, the CAAM data showed.