China: economy develops as car segment continues expansion image

In China, which is already the world’s biggest auto market, the forecasted sales rise prompts businesses from transportation companies, auto parts producers and truck plants to manufacturing facilities and dealers to expand rapidly.

In 2013 China became the first single market to surpass 20 million auto units sold for a year, as foreign auto brands expand their presence and especially their manufacturing capabilities locally.

“Many big cities along coasts are not seeing a big increase in cars as many people already have cars,” said Koji Endo, an auto analyst at Advanced Research Japan. “For the next few years, growth should come from small coastal areas and rural areas in the west where car ownership is still very low and income is relatively low. Transportation is needed not just for cars but also auto parts.”

Endo forecasts China’s 2014 sales will probably grow from 22 million in 2013 to at least 24 million units this year and could exceed 30 million by 2020. For a quick comparison, the second-biggest car market, the US, achieved 15.6 million deliveries last year.

According to the China Association of Automobile Manufacturers though, in 2014 sales are expected to grow by around 10%, down from 14% a year ago, as the huge growth of car sales has become a source of air pollution. A growing number of China’s cities are now rallying to the governmental plans of cutting air pollutants and are imposing a cap on new car registrations.

Via Bloomberg