Beijing, Dec 29, 2007 (Jiji Press) - China's automobile market is burgeoning on the back of high economic growth and rising incomes, with new auto sales in the country likely to top the 10 million mark next year, up from an estimated 8.5 million units this year.
Of the total forecast for 2008, new vehicle sales in China are expected to increase 15-20 pct from the previous year to more than seven million units for passenger cars, according to industry watchers.
China, which boasts the world's second biggest vehicle market after the United States, will get boosts from double-digit economic growth, vehicle price cuts by automakers, and a string of new model launches, the watchers said.
While German automakers such as Volkswagen AG are losing presence in the Chinese market, Japanese and Chinese automakers are vying to take market share from South Korean makers, which have lost momentum in recent years.
Japanese players - Toyota Motor Corp. <7203>, Nissan Motor Co. <7201> and Honda Motor Co. <7267> - could capture as much as 30 pct of the Chinese market in 2008.
Regarding sedan sales for January-November 2007, Chinese joint ventures of Toyota, Nissan and Honda were ranked fifth, sixth and seventh, respectively. The combined market share in the first 10 months of this year came to 27 pct for Japanese vehicles, against 31 pct for Chinese vehicles.
Japanese automakers have gained the confidence of consumers in China by scoring high marks in the country's crash tests and by expanding their dealerships, according to Hiroshi Honkawa, chief representative of the Japan Automobile Manufactures Association's Beijing Office.
But the firms cannot be overly optimistic about the future course of the Chinese market, as Beijing is apparently considering introducing gasoline taxes as part of energy-saving measures.
According to the China Industry News newspaper, the number of vehicle owners per 1,000 people came to less than 50 in China, far lower than the world average of 120, indicating that there is still considerable room for growth in China.
China replaced Japan as the world's second biggest market in 2006. China's entry into the World Trade Organization in 2001 prompted major foreign players to launch operations, helping new auto sales to surge to 7.2 million units in 2006 from 3.25 million units in 2002.
Copyright © 2010 JCN. All rights reserved. A division of Japan Corporate News Network KK.
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