The Automotive Industry in China has been the largest in the world since 2008. Since 2009, annual production of automobiles in China exceeds that of the European Union or that of the United States and Japan combined!
While we had studied the US & Pakistan Car Market, we always wanted to present a report on China’s Auto Sales considering these facts –
- Similarity to Indian Market – Although we are estimated 15 years behind Chinese Automotive Market, India’s demographics and population has immense similarity with the neighbor. Currently, Chinese Car Market is over 7 times that of India (whereas population of China is only 1.1 times that of India)! Car Sales trend of past 15 years –
- Chinese love for SUVs/Crossovers is also similar – In 2015, sales of Crossovers and SUVs soared 52% to 6.22 million units, and MPVs increased 10% to 2.11 million nos, while sedans slumped 5.3% to 11.72 million units.
- Sheer Size – China’s No.1 Selling car Wuling Hongguang (Chevrolet Enjoy) sells higher than what Toyota+GM+VW+Nissan+Renault+Skoda sells in India! In 2015, cars sales in China increased by 9.1% – a growth rate just behind of that of Europe. It remains the only market in the world which has crossed the 20 million units sales. Cars Sales Registration data for Top International Markets –
- Trivial History – Major Automotive companies are ‘State-Owned‘ – China has its traditional “Big four” domestic car manufacturers: Shanghai General Motors, Dongfeng, FAW, and Chang’an. All the automotive MNC’s are made to tie-up with a state owned corporation for setting up shop in the country.
- Highly Profitable Sector – The profit of car dealers in China is quite high comparing to the rest of the world, in most cases 10%. This is due to the non-transparent invoice price as announced by manufactures and to the premiums they charge for quick delivery. Due to the lack of knowledge for most customers, dealers can sell add-ons at much higher prices than the aftermarket. There is no regulation by either the government or associations. Hence OEMs make big buck as well with the volume!
- Electric Cars Revolution – China’s electric car sales outstripped that of US’s in 2015. Near to 2,50,000 electric cars were sold in China last year!
- Brands Galore – Near to 445 Brands/Models are in sale! Just imagine the plight of an average consumer – which car to pick?
Car sales in China increased 8.7% in 2015 to top 20 million units for the first time ever. Out of the Top 50 selling cars in China (for 2015), 13 brands are common to the Indian Market. However, the Indian counterpart sales is nothing to boast about. The sales analysis to be found here –
China also has a Dragon’s share for the premium brands. China contributes to over 1/4th of the overall sales of the German biggies. The world’s no.1 premium car maker BMW stands second in the list in China. Audi ranks first in the Chinese rankings and over 32% of its sales comes from China! In 2015, for the first time ever in a calendar year, China was the most-important single-country market for Mercedes Benz. Mercedes Benz sales in China increased by 32.6% to a record 373,459 cars. In China, Mercedes Benz is still around 200,000 cars behind leader Audi but nearly on par with BMW. Important for Mercedes Benz’s bottom line, a third of all S-Class cars are now sold in China with deliveries of the Mercedes-Maybach in China around 500 cars per month.
Since the introduction of economic reforms in 1978, China has become one of the world’s fastest-growing major economies. As of 2014, it is the world’s second-largest economy by nominal total GDP and largest by purchasing power parity(PPP). China is also the world’s largest exporter and second-largest importer of goods. China is a recognized nuclear weapons state and has the world’s largest standing army and second-largest defense budget. We have a lot to catch behind this Asian Superpower – and ensure we do not repeat mistakes that it did (the growth in cars made it the most polluted country in the world as well – right time to focus on BS6 and Electric Cars). Also Indian Government should initiate reforms on infrastructure and public transportation to target holistic growth.