Most of the world’s carmakers, in Guangzhou for the city’s motor show, expect China to keep providing much-needed relief from weak car sales elsewhere next year, even as local brands raise their game to grab a bigger slice of their home market.
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Government stimulus plans have already pushed China ahead of the US as the world’s biggest car market this year and industry executives told Reuters they expected robust economic growth to push sales up at least 10% in 2010 even without the incentives.
“I forecast the market will continue to rise next year but not repeat this year’s explosive growth,” said Yao Yiming, executive vice president of Guangqi Honda, a joint venture between Honda Motor and Guangzhou Automobile.
A more measured pace of growth may come as a short-term relief. The exponential growth this year has left many struggling to keep pace with demand and scrambling to add capacity to prevent consumers from fleeing to rival products.
“It’s a kind of challenge for next year,” Yasuaki Hashimoto, president of Nissan Motor’s local subsidiary, told Reuters, referring to tight supply.
Hashimoto said Nissan and its local partner Dongfeng Motor Group aim to boost sales to 600,000 vehicles in 2010 from more than 500,000 units this year. Nissan is currently building a plant in the southern city of Guangzhou, adding 240,000 units of annual capacity as soon as two years from now.
Top seller General Motors is also racing to expand sales as it expects a 10-15% rise in 2010 after an estimated 50% jump this year.
“We spend about a US1bn a year (in China),” said GM China president Kevin Wale. “We have been for the past two years and we expect to do that as we go forward,” he told Reuters.
Rival Toyota, which launched the Lexus GX460 mid-sized sport utility vehicle in a world premiere at the show, said it expects its sales in China to grow 17% in 2010, to 800,000 vehicles.
The 45% surge in China’s car sales so far in 2009 has also left other emerging markets such as India and Brazil behind, while Russia – once seen as the most promising of emerging markets – has seen car sales fall by half.
Geely Automobile Holdings, whose parent has been named by Ford as the preferred bidder for Volvo, said it expects its sales to grow 20-30% next year – even without government stimulus – exceeding expected growth for the overall market.
Geely currently has just 2.2% of China’s passenger car market, lagging Chery, the top-selling Chinese brand, which has 4.1%.
