China’s Ping an Bank estimates the domestic automotive market will reach 28m-30m vehicles by 2020 as outlined in the government’s 13th five-year plan.
The forecast was made at this week’s Global Automotive Forum in Chongqing and, despite the undoubted brake on the former huge increases in the economy’s performance, the data demonstrates why so many overseas OEMs and suppliers still believe in Chinese potential.
Go deeper with GlobalData
“After the government issued the [plan], by 2020, production and sales volume will be around 28m-30m,” Ping An Bank president of transportation finance, Luo Zheng, told the conference.
“[Some] 10% of Chinese-made vehicles will be exported to foreign countries. We have noticed some kind of a new trend for the automotive sector. It has slowed down and we need to reform the supply side.
“The automotive sector needs the support of the finance sector. By 2020, we will have around 30m vehicles and the market share of each vehicle is a huge number.
“Cooperation between the auto industry and the finance sector will increase. We established a transportation department to give support to China’s automotive sector. In terms of providing financial solutions for OEMs, we are providing forms of financing.”
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataDeloitte China chief economist & partner, Xu Sitao, welcomed the adoption of the [plan] as “a very good one” although he cautioned the previous massive growth rates were unlikely to be repeated.
“The hottest word is the new normal,” said Sitao, adding: “If China wants to reach 6% or 7% GDP growth in the long term, it is not so possible.
“When I talk to local officials, the ultimate way [thinking] is to slow down. Whether it is 4% or 5% of GDP growth, I am not sure.
“When China exports more and more [there] is protectionism. Protectionism is going to affect international trade. In certain sectors, vehicle capacity is a[n] issue worldwide. We have to solve the over-supply capacity issue.”
