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Monday 23 November 2009
Global carmakers look to China for continued growth
Car makers from General Motors to Toyota Motor expect mainland to keep providing much-needed relief from feeble car sales elsewhere next year, even as local brands raise their game to grab a bigger slice of their home market.
Global carmakers look to China for continued growth
Reuters in Guangzhou 23 November 2009
Car makers from General Motors to Toyota Motor expect mainland to keep providing much-needed relief from feeble car sales elsewhere next year, even as local brands raise their game to grab a bigger slice of their home market.
Mainland’s importance has grown beyond expectations for the auto industry as government steps to stimulate sales nudged it past the United States to become the world’s biggest car market this year.
While aggressive tax cuts and subsidies have been behind much of the demand, auto executives gathered at the Guangzhou auto show on Monday said they expected robust economic growth to push sales up at least 10 per cent next year even without the incentives.
“I forecast the market will continue to rise next year but not repeat this year’s explosive growth,” said Yao Yiming, executive vice-president of Guangqi Honda, a joint venture between Honda Motor Co and Guangzhou Automobile.
A more measured pace of growth may come as a short-term relief. The exponential growth this year has left many struggling to keep pace with demand and scrambling to add capacity to prevent consumers from fleeing to rival products.
“It’s a kind of challenge for next year,” Yasuaki Hashimoto, president of Nissan Motor’s local subsidiary said, referring to tight supply.
Hashimoto said Nissan and its local partner Dongfeng Motor Group aim to boost sales to 600,000 vehicles next year from more than 500,000 units this year. Nissan is currently building a plant in Guangzhou adding 240,000 units of annual capacity as soon as two years from now.
Top seller General Motors is also racing to expand sales as it expects a 10 to 15 per cent rise next year after an estimated 50 per cent jump this year.
“We spend about a billion dollars a year [in mainland],” said GM China President Kevin Wale. “We have been for the past two years and we expect to do that as we go forward,” he said at the auto show.
Rival Toyota, which launched the Lexus GX460 mid-sized sport utility vehicle in a world premiere at the Guangzhou auto show, said it expects its sales in mainland to grow 17 per cent next year, to 800,000 vehicles.
The world’s biggest automaker is set to lag the market with a similar pace of growth this year, having fallen behind South Korea’s Hyundai Motor and Nissan.
Beijing has made no formal decision on whether to extend the stimulus measures beyond the official cut-off date of December 31.
But many executives have said consumers are generally expecting the incentives to remain in place beyond December, potentially fanning more sales.
The 45 per cent surge in mainland’s car sales so far this year has also left other emerging markets such as India and Brazil behind, while Russia has sunk into oblivion as the global financial crisis slashed car sales there in half.
With so much promise of latent demand in the world’s most populous country, local brands are looking to step up their game.
Geely Automobile Holdings, whose parent has been named by Ford Motor as the preferred bidder for the Volvo cars unit, said it expects its sales to grow 20-30 per cent next year – even without government stimulus – exceeding expected growth for the overall market.
Geely currently has just 2.2 per cent of mainland’s passenger car market, lagging Chery Automobile Co, the top-selling local brand, which has 4.1 per cent.
Foreign auto makers will also face increased competition from their own partners as they seek sales growth under their own brands with know-how gleaned from partners over the years.
SAIC Motor Corp, the country’s biggest carmaker and GM’s main partner, said it expects to double its sales of own-brand vehicles next year to 180,000 units.
Sales this year would themselves be nearly double an original target thanks to the successful launch of the mid-range sedan line, Roewe, developed with technology acquired from defunct British carmaker MG Rover.
“We do not dare say that we are very successful with our own-brand cars,” SAIC Motor president Chen Hong said.
“This is a difficult path and there is lots of work to do.”
2 comments:
Global carmakers look to China for continued growth
Reuters in Guangzhou
23 November 2009
Car makers from General Motors to Toyota Motor expect mainland to keep providing much-needed relief from feeble car sales elsewhere next year, even as local brands raise their game to grab a bigger slice of their home market.
Mainland’s importance has grown beyond expectations for the auto industry as government steps to stimulate sales nudged it past the United States to become the world’s biggest car market this year.
While aggressive tax cuts and subsidies have been behind much of the demand, auto executives gathered at the Guangzhou auto show on Monday said they expected robust economic growth to push sales up at least 10 per cent next year even without the incentives.
“I forecast the market will continue to rise next year but not repeat this year’s explosive growth,” said Yao Yiming, executive vice-president of Guangqi Honda, a joint venture between Honda Motor Co and Guangzhou Automobile.
A more measured pace of growth may come as a short-term relief. The exponential growth this year has left many struggling to keep pace with demand and scrambling to add capacity to prevent consumers from fleeing to rival products.
“It’s a kind of challenge for next year,” Yasuaki Hashimoto, president of Nissan Motor’s local subsidiary said, referring to tight supply.
Hashimoto said Nissan and its local partner Dongfeng Motor Group aim to boost sales to 600,000 vehicles next year from more than 500,000 units this year. Nissan is currently building a plant in Guangzhou adding 240,000 units of annual capacity as soon as two years from now.
Top seller General Motors is also racing to expand sales as it expects a 10 to 15 per cent rise next year after an estimated 50 per cent jump this year.
“We spend about a billion dollars a year [in mainland],” said GM China President Kevin Wale. “We have been for the past two years and we expect to do that as we go forward,” he said at the auto show.
Rival Toyota, which launched the Lexus GX460 mid-sized sport utility vehicle in a world premiere at the Guangzhou auto show, said it expects its sales in mainland to grow 17 per cent next year, to 800,000 vehicles.
The world’s biggest automaker is set to lag the market with a similar pace of growth this year, having fallen behind South Korea’s Hyundai Motor and Nissan.
Beijing has made no formal decision on whether to extend the stimulus measures beyond the official cut-off date of December 31.
But many executives have said consumers are generally expecting the incentives to remain in place beyond December, potentially fanning more sales.
The 45 per cent surge in mainland’s car sales so far this year has also left other emerging markets such as India and Brazil behind, while Russia has sunk into oblivion as the global financial crisis slashed car sales there in half.
With so much promise of latent demand in the world’s most populous country, local brands are looking to step up their game.
Geely Automobile Holdings, whose parent has been named by Ford Motor as the preferred bidder for the Volvo cars unit, said it expects its sales to grow 20-30 per cent next year – even without government stimulus – exceeding expected growth for the overall market.
Geely currently has just 2.2 per cent of mainland’s passenger car market, lagging Chery Automobile Co, the top-selling local brand, which has 4.1 per cent.
Foreign auto makers will also face increased competition from their own partners as they seek sales growth under their own brands with know-how gleaned from partners over the years.
SAIC Motor Corp, the country’s biggest carmaker and GM’s main partner, said it expects to double its sales of own-brand vehicles next year to 180,000 units.
Sales this year would themselves be nearly double an original target thanks to the successful launch of the mid-range sedan line, Roewe, developed with technology acquired from defunct British carmaker MG Rover.
“We do not dare say that we are very successful with our own-brand cars,” SAIC Motor president Chen Hong said.
“This is a difficult path and there is lots of work to do.”
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