In its latest assessment, automotive forecasting firm PwC Autofacts forecasts that the Chinese light vehicle market will grow by almost 10% in 2012 before accelerating further in 2013 and 2014.
In an analyst note, Autofacts says that the upward trend is ‘predicated on demand expectations from China’s burgeoning interior markets’. The trend is part of a change to vehicle buyer demographics as China’s economic development spreads inland and Beijing shifts its mandate towards increasing domestic consumption. Autofacts says a a new wave of consumers from interior China’s tier 2 and tier 3 cities will represent a growing share of the auto market.
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Autofacts projects that the annual vehicle market in China wull reach 27m units by 2018.
However, the report warns that high levels of fragmentation will continue to hamper the Chinese auto industry despite the Chinese government’s efforts to encourage consolidation. PwC warns that while mainstream Chinese automakers and their foreign JV partners are struggling to meet demand, many smaller domestics are currently saddled with excess capacity.
