According to the latest forecasts, the difference between the first and second world’s largest markets is going to be even steeper in 2015 even as the former is predicted to see its slowest growth to date in the last decade.
The No. 1 global market – China – is scheduled to hit an all time record of 4.6 million units above the No. 2 market – the United States, even as the global automakers feel pressured in the former by the slowest economy growth since 1990. But, given the fact that Chinese vehicle ownership sees a 10 times smaller rate than in America, the companies and industry analysts believe there’s still room for tremendous growth. According to World Bank data available up to 2011, the nationwide vehicle penetration rates are worlds apart for the two countries: just 69 vehicles for 1,000 people in China, while the US sees 786 per 1,000. And according to General Motors, around two thirds of all buyers were first-time owners until recently.
“With ownership penetration in the U.S. already high, it’s more of a replacement market,” comments Klaus Paur, the London-based global chief of automotive at researcher Iposos. He goes on to add that because China still has numerous first-time buyers the possibilities for growth are still positive – especially if carmakers seek penetration towards the smaller, inner cities of the country. The China Association of Automobile Manufacturers sees 2015 sales growing to 21.3 million units, though the climb is barely above the predicted overall surge of the economy. Meanwhile, the US market could rise by 1.2% to 16.7 million vehicles, according to a Bloomberg survey – slower than 2014’s increase of 5.9%.