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back to index backCHINAtalk July,  2005

Is The China Market Back?

June Sales Soared 55.8% From Year Ago; GM Says It Overtook Volkswagen

The question on the minds of people watching the Chinese auto market last week was a lot more pleasant than the worry about when the market would recover that has been eating them up for the past 15 months. The new query is whether the salad days of 50%-plus growth that prevailed in 2002-2003 have returned.

The Shanghai Daily said figures from the locally-based National Car Makers Association put June sales at 296,811 passenger vehicles, up 55.8% from the year ago month.

Separately, General Motors reported that it has finally overtaken Volkswagen in overall sales in China. Sales of passenger cars alone climbed 60.3%, to 264,677, the NCMA figures showed. The Shanghai Daily said Rao Da, the NCMA secretary general, attributed the sudden growth spurt to a consumer perception that prices have finally stabilized after a year and a half in which a bitter competition for share in a falling market led to a wave of reductions. Actually, sales rose modestly in April and climbed 22% from a year ago in May. The June surge helped overshadow three bad months at the beginning of the year, and boost sales for the first half to 1.46 million, up 15.6% from 2004.


The paper cautioned that the June figure may only look strong because the year-ago month was pretty dismal. It added that NCMA figures often differ from those produced by the Beijing-based China Association of Automobile Manufacturers, or CAAM, though it's hard to imagine that there will be much of a variance in the general direction.

A report by the semi-official China Daily said General Motors overtook VW with sales of 308,722 vehicles, up 18.9% from a year ago, to a 10.9% market share. VW, which has seen its sales skid sharply under the combined assault of U.S. and Japanese makers, sold 262,198 during the half, through its twin ventures with Shanghai Automotive and First Auto Works.

GM China president Kevin Wale told reporters in Shanghai that with the rollout of additional products in the second half... we anticipate double-digit sales growth and another record year for GM in 2005.” The company has planned launches of 10 new or upgraded vehicles in China this year. He added that GM expects the Chinese market to grow 10-15% a year for quite some time,” which under any international standards is a phenomenal rate of development.

Reliance on Daewoo

The paper observed that half or more of GM's lineup in China, including the Buick Excelle, Chevy Epica and Chevy Spark, is designed and/or made by South Korean subsidiary GM Daewoo. The company is bringing in another Daewoo product, the Chevy Aveo, later this year. The company is on its way to building a capacity of 1.3 million vehicles a year in China. Other makers are also reporting strong gains for the first half.


A Nissan's joint venture Dongfeng Motor said its business more than doubled during the half, to 66,476, from 27,204 a year ago, and it said it expects the Tiida, launched in April, and a variant due out later this year, to help it hit its target of 140,000 Nissan vehicles during the year, up from 61,000 in 2004.

A Beijing Hyundai said first half sales soared 95% from a year ago, to 115,796, and it raised its full year target 15% to 230,000. The company claimed it held an 8% market share for the half. Reports didn't explain the discrepancy, but it may have been referring to passenger vehicles only, while GM appeared to be counting the market for all vehicles, expected to be roughly 6 million this year.

Source: Japan Automotive Digest - GAI

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