A total of 19.31 million automobiles were sold in China last year, representing year-on-year growth of 4.3 percent. Most analysts originally predicted a similar single digit sales growth rate for this year as well. However, in actuality, year-on-year growth rates for automobile production and sales volumes for the first nine months of the year ended up being 12.8 percent and 12.7 percent respectively. Those rates were even higher for passenger automobiles, reaching 13.7 percent and 14.0 percent respectively. Even if quarterly sales growth rates for the final quarter of the year remain zero, 2013's total vehicle sales volume will total 21.09 million units, representing sales growth of at least 9.3 percent. As a result, there is a good chance total sales growth rates for this year will be in the double digits.
To better understand the factors surrounding automobiles growth rates this year, Gasgoo.com (Chinese) held a week-long four question survey, collecting opinions from 2,115 industry analysts and figures.
In the first question of the survey, participants were asked to predict sales growth rates for last quarter of the year. 46 percent of participants forecasted rates of over ten percent, while 40 percent predicted growth of between five to ten percent. Only 14 percent expected growth to be under five percent.
By comparison, in similar surveys conducted earlier this year, the consensus was that sales growth rates for the third and fourth quarters would be relatively low. In a survey done in the end of June, 80 percent of the respondents predicted growth to be in the single digits, while only 15 percent forecast growth rates of over ten percent.
Looking at monthly figures, respective sales growth rates for July, August and September totaled 9.9 percent, 10.3 percent and 19.7 percent. That positive trend in sales growth is expected to continue into October. Most analysts are optimistic that sales growth for the fourth quarter will remain strong, albeit not excessively high.
In October, the Chinese government will release new policies strengthening consumer protection for automobile purchases. As a result, some analysts expect many prospective buyers to hold off purchasing a vehicle until then.
In the second question of the survey, participants were asked how they expect the revised policies to affect the market after their introduction. 26 percent of respondents predicted total sales to rise, while 35 percent forecast sales of poor quality vehicles to decrease. However, a large proportion of survey participants, 39 percent, were unconvinced that the policies will have any substantial effect on sales.
Another topic of concern is the performance of Japanese automobile manufacturers, whose sales in China have been suffering since last autumn. According to statistics from the China Association of Automobile Manufacturers, cumulative Chinese sales of Japanese brand passenger automobiles increased 73.7 percent in September, exceeding sales of German and US vehicles. That sales growth rate includes vehicles made by Mazda, which has reported negative sales growth in the country for 17 continuous months. By comparison, the cumulative sales growth for Japanese manufacturers reached 17.5 percent in 2012.
However, when asked whether or not they believe sales of Japanese automobiles will recover to average industry levels in the fourth quarter, the majority of survey participants, 59 percent, answered that they will not. By comparison, only 24 percent of respondents said that their sales will increase, while the remaining 17 percent were undecided.
One challenge Japanese enterprises face is increasing competition from foreign manufacturers such as Ford and Peugeot Citroën, who have been rapidly strengthening their Chinese localization programs by introducing new models and developing their sales networks. Japanese manufacturers, whose sales volumes are still in recovery, will have a hard time prying away sales from these relatively new entrants to the country. When asked about his forecast for Japanese manufacturers, China Association of Automobile Manufacturers Deputy Secretary General Dong Yang commented that it was still too early to predict if their sales volumes will recover or not.
The Chinese automobile market is still dominated by the 'big three': Shanghai Volkswagen, FAW-Volkswagen and Shanghai General Motors. According to the latest CAAM sales report, Shanghai VW's sales for September totaled, 141,600 vehicles, while Shanghai GM and FAW-VW's sold 134,700 and 134,100 vehicles, respectively. These three manufacturers, all of which are Sino-foreign joint ventures, have continuously ranked in the top three in the sales charts for the last few years. Looking at sales results for the third quarter, Shanghai VW led the charts with sales of 1.16 million units, followed by Shanghai GM and FAW-VW, whose sales totaled 1.16 million units and 1.13 million units respectively.
The final question of the survey asked participants to vote for which manufacturer they predict will lead the sales charts for 2013. Shanghai VW gained the most votes, 36 percent, while 29 percent voted for FAW-VW and 26 percent voted for Shanghai GM. Only two percent of respondents selected Beijing Hyundai, which has made the top three in the monthly sales charts only twice in the past two years.
