Vehicle sales in China are estimated to step up in 2013 and exceed 20 million units for the first time due to the recovery of its financial growth and urbanization. Cars and buses are included in this estimate. In a statement, the state-supported China Association of Automobile Manufacturers said that wholesale deliveries may increase by 7% this year to 20.65 million units, driven by the high demand for passenger vehicles.
SUV sales will still be the quickest-rising segment while commercial vehicles will post a slight increase. CAAM said that the auto market’s development will be aided by a “continuous and stable macroeconomic policy.” The group also said that urbanization will support the vehicle demand. It also talked about a substantial market potential for exports.
The auto demand in China is predicted to accelerate this year but the growth rate is still less than a quarter of 32% rate in 2010, which was boosted by the government stimulus. Cities like Beijing and Guangzhou want to lessen smog and traffic jams and so there are restrictions to new vehicles. The competition for market share is slated to become fiercer as foreign automakers headed by General Motors Co. and Volkswagen intensified their push into smaller cities that are typically dominated by local brands.
Jeff Chung, Hong Kong-based analyst at Daiwa Securities Group Inc., said that only some of the automakers, particularly those that have made r&d investments, will be winners. Chung explained that the “very high growth rates” will be experienced by the “best product mix and best geographic mix.” In CAAM’s projections, passenger-vehicle sales could grow by 8.5% to about 16.8 million units while commercial vehicle sales will likely make a recovery from last year's 5.5% drop to gain 1% to around 3.85 million units.