Automotive News - 2008 Guide to China's Auto Market - (Page 3)

2 0 0 8 G U I D E T O C H I N A’ S A U T O M A R K E T 3 Contents 4 2007 sales by brand As economy booms, consumers snap up SUVs and luxury cars I 6 Global automakers/ joint ventures 19 Map of production facilities in China 20 Domestic automakers 30 OEM suppliers in China Online Download this guide in pdf format at www.autonews.com /chinaguide Data in this publication were provided by Automotive Resources Asia Ltd. 1106 Q House Building Sukhumvit Soi 21 Asoke Bangkok, Thailand 10110. www.auto-resources-asia.com. Note: Sales data reflect vehicles produced in China unless noted. Cover photo: Sports car specialist Spyker Cars attracts a crowd to its stand at an auto show in China. • Photo by Patrick Firouzian n the West, higher fuel prices are prompting drivers to log fewer miles and embrace smaller, energy-efficient vehicles. Not so in China, where wealth generated by the booming national economy has more than offset rising fuel prices. In 2007, 5.2 million passenger vehicles were sold in China, up 21 percent from 2006, according to Automotive Resources Asia, a unit of J.D. Power and Associates. Gasoline-gulping SUVs enjoyed the strongest growth, up 50 percent. Auto prices across China dropped in 2007 by an average of 5.7 percent, according to the China Automotive Industry Association. Meanwhile, per capita income of urban residents increased 12.2 percent from 2006, to $1,942. The Chinese government maintains some controls on fuel prices. The most widely used grade of gasoline was raised 8 percent in November to the equivalent of $2.77 per gallon. Meanwhile, the government repeatedly has said the domestic auto industry is facing excess capacity. But automakers aren’t responding to the pressure. Almost all automakers are ramping up production and developing new models. In 2007, about 200 passenger-vehicle models were sold in China, double the number in 2005. The number will rise to 250 in 2008, according to the forecasting firm CSM Worldwide. Meanwhile, some cash-rich nonautomotive domestic companies want to enter the market. In 2007, motorcycle maker Chongqing Loncin Holdings said it would form a joint venture with the British company Antonov to manufacture small automatic transmissions for passenger vehicles in China. The move was widely seen as Loncin’s latest attempt to transform itself into an automaker. Thanks to stellar performances of new models, domestic Chinese brands and Japanese brands gained ground in 2007, largely at the expense of Korean brands. The combined market share of Chinese brands increased 2.3 percentage points while that of Japanese brands rose 1.1 percentage points. Meanwhile, Korean brands lost 3.1 percentage points. Toyota closed the year with sales up more than 60 percent over 2006. The Camry alone contributed more than half of the new volume. ROGER HART CHINA’S RIP-ROARING NATIONAL ECONOMY IS FUELING A GROWING AUTO INDUSTRY THAT HAS SPAWNED EVENTS SUCH AS THE SHANGHAI AUTO SHOW, ABOVE. By contrast, Hyundai group’s sales volume tumbled 16.5 percent last year. In 2007, Volkswagen was still the clear leader in China. Supported by its two joint ventures — Shanghai Volkswagen Automotive Co. and FAW-Volkswagen Automotive Co. — VW held a market share of 17.5 percent. It was followed by General Motors with 10.1 percent. Last year, the industry started what many expect will be a significant wave of consolidation among state-owned automakers. In December, Shanghai Automotive Industry Corp. acquired Nanjing Automobile Group Corp. The Chinese auto industry is so competitive that various automakers, such as Chery Automobile Co. and Chongqing Lifan Industry Group, see overseas markets as their best opportunity to grow. They are quickly building their presence in other developing markets, such as the Middle East, North Africa and Russia. Some Chinese automakers — including Geely Automobile Holdings Ltd., Brilliance Jinbei Automobile Co. and BYD Auto Co. — have displayed products at auto shows in the United States and Europe. But it is widely thought that they still have a long way to go to succeed in Western markets, where quality and engine emissions standards are much more rigorous than in China. — Yang Jian SALES ON THE RISE Segment sales of light vehicles in China in 2007 2007 % CHANGE SALES FROM 2006 Microcar 329,000 Subcompact 1.3 million Compact 1.9 million Mid-sized 947,000 Luxury 209,000 SUV 357,000 Small multipurpose vehicle 59,000 Multipurpose vehicle 173,000 0 4.0 31.0 29.0 35.0 50.0 16.0 22.0 Source: Automotive Resources Asia 2008 GUIDE TO CHINA’S AUTO MARKET Automotive News • J.D. Power and Associates • Automotive Resources Asia http://www.autonews.com/chinaguide http://www.auto-resources-asia.com

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