China outpaces the U.S. in car sales
Posted: Monday, February 09, 2009 11:06 AM
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Beijing, China
By Adrienne Mong, NBC News Producer
BEIJING – It looks like China may have overtaken the United States as the world’s biggest auto market. Official figures are due out this week that will show, for the first time ever, more vehicles were sold in China during January than in the United States.
It makes for a nice headline and General Motors was among the first to mention it during a conference call last week after tallying their preliminary sales figures.
At first glance, statistics would indicate, among other things, that China’s economy has not suffered as much from the global economic crisis as initially believed and that its auto industry is thriving as a key growth area for the beleaguered Big Three in Detroit.
Not so fast
Industry analysts in Beijing note that the uptick in China's sales may have been just a blip. January was a big month for retail sales here – it was the period ahead of the Chinese Lunar New Year, traditionally a busy shopping season here. Consumers were also encouraged by recent government incentives, including a 50 percent cut in sales tax for cars with engines smaller than 1.6 litres.
And industry consultants at Arthur D. Little in Beijing note several other factors. One, American consumers tend to rely on auto loans more than their Chinese counterparts, and in this climate of tight credit in the U.S. they’re not able to purchase cars as easily as before.
Two, the majority of car consumers in China are first-time buyers – more than 70 percent, compared to just 20 percent in the U.S. market. American shoppers looking to replace their vehicles might be more likely to delay their purchase while they’re uncertain about the economy – as opposed to China’s many first time buyers.
One final and sobering note: China’s market is as varied and diverse as that of any other large country, and some developing regions in the interior showed reasonably steady growth. But in the coastal areas – home to the nation’s traditionally fast-growing local economies – the news was bad.
For example, in Shenzhen and Dongguan – twin engines of China’s once-mighty manufacturing machine – absolute sales figures for 2008 dropped 12 percent and 16 percent respectively.
