CHINA: Growth could start to slow next year - JD Power

By just-auto.com editorial team | 1 December 2010

The aggressive growth rate of the Chinese car market will begin to slow next year as a result of the government's preferential policies are cancelled.

JD Power predicted in a report that total volume will reach 18m, up 30%, next year but the growth rate in 2011 will slip to 10%.

Ding Lei, chairman of SAIC-GM, told China Business News, however, that he expects the market to maintain its momentum of steady growth over the next five to 10 years and it will not change greatly in 2011 – growing by 20%.

Gan Weiwen, director of GM China, said the growth rate in 2011 will be 10 to 15% which may have negative impacts on domestic automakers, especially mini and micro car manufacturers.

China has already overtaken the US as the world's biggest car-consuming country, however, Zhu Ming, analyst with JD Power, said the government has realised the problems caused by the over-rapid growth, including traffic congestion, environmental pollution and automakers' over expansion.

According to JD Power's data, the capacity utilisation rate of domestic automakers will reach 88% in 2010 and will drop 10% in 2011. Zhu added: “Even if the capacity utilisation rate is under 75%, Chinese self-owned brands could still keep earning, so domestic automakers are not likely to face huge losses the next year."