China’s car market will be heading towards 30m units by 2020 according to forecasts produced by IHS Automotive.
The research firm’s latest analysis examines demand prospects for passenger vehicles in provinces across China.
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“If we think of China as 31 separate countries, 19 of the 20 fastest growing passenger vehicle markets in the world since 2002 are in China,” according to Henner Lehne, global head of light vehicle forecasting for IHS Automotive.
IHS forecasts that passenger vehicle volumes in the country as a whole will rise more than 10 million units a year by 2026.
IHS says that the results of its analysis show that the widely held view of China – namely that Eastern Coastal areas, approaching saturation, will be offset by growth to the West – is “overly simplistic with more complex local dynamics likely to play out”.
For example, the firm claims that while Beijing and Shanghai have been thought to have seen new passenger registrations peak (based on government regulations and license plate restrictions), IHS Automotive analysis shows some remaining medium-term sales growth prospects still remain there.
It says the “real market opportunities for automakers come from other parts of China as many provinces will experience a substantial shift in affordability, personal mobility needs, and vehicle development and production capacity improvements between now and 2026”.
IHS maintains that, as an example, Shangdong, in eastern China, is currently the ninth largest market for passenger vehicles globally, now larger than Italy or South Korea, with additional growth expected. Also in the east, Fujian province was the 66th largest passenger vehicle market globally in 2002, but ranks 36th today, larger than Norway, Peru and Israel combined. And Qinghai province, which ranked as the 116th largest market in 2002, is ranked 80th today, larger than the automotive markets in Romania or Vietnam.
IHS Automotive has also identified some provinces that will see a significant slowdown in sales by the middle of the next decade. Shangdong, for example, was averaging double digit growth in passenger sales for many years, however this rate is expected by IHS to fall dramatically and average below 5 percent growth by 2026.
