Automakers expect Chinese growth of up to 10 percent in 2012 image

Passenger car sales in China will rise as much as 10 percent next year, supported by first-time buyers, according to estimates from major automakers like General Motors, Volkswagen, Honda and Nissan.

GM, the largest overseas automaker in China, forecasts car sales will expand 10 percent next year, while VW, Honda and Nissan estimate as much as 10 percent growth. Sales in China rose 5.9 percent in the first 10 months of 2011, according to the China Association of Automobile Manufacturers.

The carmakers’ optimism is in contrast with warnings issued by Chinese vice premier Wang Qishan of risks to the world’s second-largest economy posed by a prolonged global recession. Car sales have slowed this year, as sales-tax breaks and incentives ended and borrowing costs increased. The national auto association has projected sales of passenger and commercial vehicles to increase less than 5 percent in 2011, which would be the slowest growth pace in 13 years.

“Customers are finding it tougher to get loans now and dealers are facing issues as well,” Seiji Kuraishi, Honda’s head of China operations, was quoted as saying by Bloomberg. “At the same time, demand from central and western parts of China is still propping up demand for passenger cars,” he added.

VW’s Karl-Thomas Neumann, Volkswagen China CEO, is even more optimistic: “There is so much growth potential. The point where people earn enough money that they consider buying a car and then buy one has been reached for so many people here.”