China on Wheels

Traffic jams like this one in Beijing are likely to get much worse.  Photo:  China Daily 

In 2009, China’s auto sales surpassed those of the U.S., reaching 13 million units (cars and light trucks).  This came as The Great Recession drove U.S. auto sales to a level far below the record of 17.4 million sales in 2005.  By 2009 U.S. sales had plummeted to 10.4 million for the year.

Through November 2010, China’s auto sales reached 16.4 million, putting that country on track to equal or exceed the U.S. 2005 record.  The forecast for 2011 is for sales to reach 20 million which would dwarf the U.S. record.

Meanwhile, the U.S. auto market seems to be headed for 2010 sales between 11 and 12 million, as seen in the following graph from Calculated Risk.

Click on graph for larger image.

JD Powers has forecast U.S. light vehicle sales to be 11.6 million in 2010 and 13.2 million in 2011.

Foreign companies stand to gain market share next year.  From the GEI News Blog:

Overseas automakers including GM, Ford Motor Co and Nissan Motor Co should benefit next year if the Chinese government ends a rebate that favors domestic manufacturers as expected by Dec 31, said Bill Russo, a Beijing-based senior adviser at Booz & Co.


It looks like China will move into position as the largest consumer of automobiles in history and is likely to remain there.

As shown in the following graph, it could be said that China and the U.S. are driving in different directions.  However, it is to be expected that U.S. auto sales should continue to improve so that the down sloping blue arrow may well be temporary.  It is not reasonable to expect that the U.S. growth rate will soon (if ever) reach that of China.

Simply based on population ratios it might be expected that China could eventually have around 3 – 4 times the auto sales of the U.S.

Share this Econintersect Article:
  • Print
  • Digg
  • Facebook
  • Yahoo! Buzz
  • Twitter
  • Google Bookmarks
  • LinkedIn
  • Wikio
  • email
  • RSS
This entry was posted in China, Durable Goods, Manufacturing and tagged , . Bookmark the permalink.

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.