Car sales in China last year surpassed US
More than 13.5 million vehicles were sold in China last year, Xinhua reports, making it the world's top car market for the first time. But sales are expected to slow this year.
The report, which cited the China Automotive Technology and Research Centre (CATRC), said car sales in the United States totalled 10.43 million in 2009, 2.8 million fewer than the year before. Sales in China rose 40 per cent from 2008.
China's revenues from car sales, however, are still far lower than in the US. In China, the average vehicle costs 130,000 yuan (HK$147,433) after tax, compared to 204,800 yuan in the US, CATRC statistics showed.
The four largest carmakers in China accounted for 60 per cent of the country's sales last year.
SAIC Motor Corp, the country's largest carmaker, sold 2.72 million vehicles, a 57 per cent increase from 2008. The company said in a filing to the Shanghai stock exchange on January 5 that net income for last year rose a staggering 900 per cent.
Foreign carmakers also saw their sales in China increase strongly last year. Honda said it sold 576,223 units, up 23 per cent, and Toyota reported a 21 per cent rise to 709,000 units.
Both, however, lag behind General Motors, which saw sales jump 66.9 per cent last year from 2008 to 1.83 million.
Sales of its joint venture with SAIC Motor Corp, Shanghai GM, were up 63.3 per cent at 727,620 units.
The China Association of Automobile Manufacturers is to announce official figures next week, but Xinhua's numbers are in line with analysts' expectations.
'Sentiment is in the right spot,' said Scott Laprise, an analyst with CLSA based in Beijing. 'When car sales plunged in 2008 it wasn't because people didn't have cash. It was just that sentiment turned bad.'
On top of government incentives, extensive advertising also helped create a 'water cooler effect where everyone was talking about buying a car'.
'2009 turned out to be 'To whom it may concern: Be the year of buying the car', especially as 2008 ended so poorly,' Laprise said.
Analysts expect momentum in the car market to be more subdued this year, 'largely because car sales in 2009 were so shocking', said Johnny Wong, an analyst at Yuanta Securities in Hong Kong.
Laprise said a 'positive stock market, positive real estate market and good sentiment on the ground' will all be important drivers for the car market this year, but that the health of credit markets will be another key factor.