In the previous time, many Chinese experts in auto industry made optimistic predicts on the future of Chinese auto market. Some predict that the peak annual auto sales volume in China would be 40m units in future 10 years, and even some predict to be 45m units. However, we believe it’s a big mistake that the number may be under 30m units, much lower than others’ expectation. The main reasons are concluded in the following three points.
One, China’s population structure determines that less people will choose to by vehicles in the future. China’s aging population is expanding fast, with those aged over 60 years exceeding 200m. Aged population has decreasing purchasing desire, bringing decreasing auto consuming demands. Besides, the urbanization process makes fourth- or fifth-tier cities less attractive to young people.
Two, the limited purchasing policy eliminates potential consumers. First-tier cities have all
practiced limited purchasing policies, followed by Tianjin, Hangzhou, Guiyang and other cities.
Three, the development of sharing economy cuts down great demands of purchasing vehicles. The auto sharing market, including carpooling, free riding and tailored taxi services, are developing fast. Young generations are accustomed to using taxi booking apps, joined by more business people.
Since there are so many adverse factors, will the Chinese auto market face a pessimistic future? I don’t think so. Currently, China’s auto population reaches 170m units, consuming 24.5m units every year, ranking top in the world. In the future five to ten years, China’s auto sales volume will also keep a high growth, making the auto population larger than 300m units. However, Chinese auto brands need to promote their international influence in the future.
