Millions of Chinese are abandoning the saddle for the steering wheel, creating the world’s fastest growing car market. More than one million cars were sold in China in the first 11 months of 2002, a massive 55.4 per cent sales increase compared with the same period in 2001.
Production continues to rise at a remarkable rate as more families, especially in urban areas, decide to buy cars. By 2010, new car sales are expected to exceed two million a year, according to a study by leading European consultant Roland Berger Strategy Consultants.
By the end of last October, there were an estimated 1.8 million cars in Beijing alone, of which over one million were privately owned. A week-long motor show in the Chinese capital last year attracted more than 400,000 visitors.
China’s huge car growth is not confined to Beijing. A recent survey in Shanghai, Guangzhou, Chengdu and Wuhan, all with populations of more than 10 million, shows that more than 10 per cent of people in these cities say they are "likely" or "sure" to buy new family cars in the next three months.
The continuing repaid development of the Chinese economy and rising incomes are the main factors behind the car boob. The big growth areas are in the major cities. Last year, although China’s per capita gross domestic product was on €910, figures in the cities of Guangzhou, Shaghai and Beijing reached €4,568, €4,500 and €3,000 respectively.
The buying spree has attracted some of the world’s big car makers who must operate through joint ventures with local manufacturers.
General Motors has been operating a joint venture in China for four years. It has seen its sales double in the first 11 months of last year. GM says that sales of its Buick mid-size sedan rose 96 per cent year-on-year to 35,420 from January to November 2002. Sales of the Buick GL8 executive awgon rose nearly 50 per cent to 14,139, while sales of the Sail compact jumped 129 per cent to 50,449.
Volkswagen has been making cars in China for 17 years. It sold 200,000 cars last year in its joint venture with China’s biggest car manufacturer, First Auto Works (FAW) in Changchun in the north-eastern province of Jilin.
Annual production at the FAW-Volkswagen plant, which make the Audi, Bora and Jetta models, is expected to rise to 300,000 by the end of 2003. Last year alone FAW-Volkswagen sold 50,000 Boras, 35,000 Audi A6 models, and 120,000 Jettas.
Peugeot’s joint venture with Dongfeng expects to nearly triple annual sales by 2006. By then it expects to sell more than 250,000 vehicles per year.