China drives auto growth

04 January 2012

BEIJING: Rising demand in China is set to fuel the growth of the global automotive sector during the next five years, with foreign brands currently best-placed to exploit this trend.

Polk, the specialist insights provider, estimated that worldwide auto sales would climb by 6.7% year on year in 2012, reaching 77.7m units. This total is due to hit 96.3m units by 2016.

More specifically, China's figures are predicted to expand by 16% on an annual basis in 2012, coming in at 17.9m vehicles for the 12 months as a whole. By 2016, this amount is pegged to stand at 23.6 vehicles.

"China is expected to make the largest contribution to global sales growth for new vehicles," the study added. "Polk analysts anticipate much of this growth to occur outside of the large metropolitan cities of Shanghai and Beijing."

By comparison, the US is likely to see sales of cars, lights trucks and commercial vehicles come in at 13.7m units this year and 16.3m units at the end of the forecast period.

Similarly, European growth rates will be relatively modest, expanding to 23.7m vehicles at the close of 2016 from a starting point of 19m units in 2012.

China also appears to be stronger than other key fast-growth economies, as Brazil's totals increase from 3.6m to 4.3m in this timeframe. Elsewhere, the Russian market may remain flat in 2012 but enjoy more favourable trends going forward.

In an example of these processes in action, Bentley sold more cars in China than in the UK for the first time last year.

Such a result left the world's most populous nation behind only the US as a source of demand for the high-end marque, which is owned by Volkswagen. "This achievement is even more remarkable considering Bentley has been present in Mainland China for less than ten years," Bentley said in a statement.

Overseas brands including General Motors, Ford and Volkswagen are also attempting to enhance their position China, where auto sales rose by just 2.6%, to 16.8m units, in the first half of 2011, according to the China Association of Automobile Manufacturers.

From January to November last year, domestic brands saw their combined sales decline by 2.4% to 5.5m units, indicating the greater strength of their foreign rivals.

"The sharp decrease shows transformation pains that homegrown brands are experiencing," said Cheng Zhao, director of the Anhui Economic and Information Technology Commission's industrial policy department, said.

Data sourced from Polk/People's Daily; additional content by Warc staff