China Ends U.S.’s Reign as Largest Auto Market (Update2)

China Ends U.S.’s Reign as Largest Auto Market (Update2) http://www.bloomberg.com/apps/news?pid 601087&sid®.x_r_l9NZE
Jan. 11 (Bloomberg) -- China supplanted the U.S. as the world’s
largest auto market after its 2009 vehicle sales jumped 46 percent, ending more than a century of American dominance that started with the Model T Ford.
The nation’s sales of passenger cars, buses and trucks rose to 13.6 million, the fastest pace in at least 10 years, according to the China Association of Automobile Manufacturers. In the U.S., sales slumped 21 percent to 10.4 million, the fewest since 1982, according to Autodata Corp.
China’s vehicle sales have surged since 1999 as economic growth averaging more than 9 percent a year has helped automakers including General Motors Co. and Volkswagen AG compensate for slumping demand in the U.S. and Europe. The market will likely remain the world’s largest, even as sales slow this year on a reduction in tax cuts, according to Booz & Co.
“China is becoming the center stage of development for the 21st century global auto industry,” said Bill Russo, a Beijing- based senior adviser at Booz & Co., which advises automakers. “Economic growth has directly translated into growth in automobile sales.”
December sales of passenger cars, trucks and buses rose 92 percent to 1.4 million. For the whole of 2009, passenger-car sales rose 53 percent to 10.3 million.
‘Rising Challenges’
“The incredible growth rate last year is not going to be repeated in 2010,” said Yu Bing, an analyst at Pingan Securities Co. in Shanghai. “Automakers will face rising challenges in China this year with slower demand growth and increasing competition.”
China’s government last year halved the sales tax on new vehicles to 5 percent and offered 5 billion yuan ($732 million) in cash to replace old ones, insulating the country from slumping global demand. The Chinese government announced plans on Dec. 10 to scale back the measures, including raising the tax on new vehicles with engines of 1.6 liters or smaller to 7.5 percent.
Vehicle Ownership
China’s vehicle ownership climbed to 51 million by the end of 2008 from 1 million in 1977. Per capital disposable income for Chinese households increased 46-fold in nominal terms during the period, also making the country the world’s biggest markets for products such as cell phones, beer and microwave ovens.
GM and Volkswagen have targeted growing Chinese demand to compensate for slumping sales in the U.S. and Europe.
GM, the biggest overseas automaker in China, said on Jan. 4 that its Chinese sales rose 67 percent last year to a record 1.83 million vehicles. Shanghai General Motors Co. sold 727,620 cars last year, an increase of 63 percent. GM sold 1 percent stake in Shanghai GM in December to partner SAIC Motor Corp., China’s largest domestic automaker. The $84.5 million deal will leave GM with a 49 percent stake in the venture.
Sales at SAIC-GM-Wuling Automobile Co., China’s largest minivan maker, rose 64 percent to 1.1 million vehicles, accounting for about 60 percent of GM’s China sales. The minivans are sold for as little as $4,000 each.
China Investment
Ford Motor Co. is spending $490 million on a third plant in China, while Volkswagen plans to invest 4 billion euros ($5.7 billion) in the country by 2011. Seoul-based Hyundai intends to build a third Chinese factory as it aims to boost local capacity by 50 percent to 900,000 vehicles a year by 2011.
China had 117 automakers at the end of 2008, according to the automobile association, raising the possibility of overcapacity. Automakers should “keep their heads cool” to prevent expanding production beyond demand, Chen Bin, who oversees regulation of China’s auto industry at the National Development and Reform Commission, said last year.
Henry Ford introduced the Model T in 1908 as the world’s first automobile affordable for a mass market. The car was produced at the Piquette Plant in Detroit, helping the city become synonymous with the auto industry. GM, also based in the city, grew into the world’s largest automaker.
The U.S. has since lost out to Asian carmakers producing cheaper and more fuel-efficient models. Toyota Motor Corp. ended GM’s 77-year reign as the biggest automaker in 2008. General Motors Corp. and Chrysler also both filed for bankruptcy as the worst recession since the Great Depression sapped auto sales.
--
Civis Romanus Sum

Add pictures here
✖
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
One would think any government, that wants to increase growth in it country, would be cutting taxes as have China and Germany.
History has proven over and over that the US economy grew every time federal tax RATES were cut, as they were under Presidents Kennedy, Reagan and Bush. It is basic economics 101. The more dollars in the hands of consumers, the more times they change hands and the more often they are taxed by the federal, state and local governments and produce MORE, not fewer, taxes for each of them The problem for us is we have a bunch of DIM socialist who are now running our county who want to gain more control over the country, rather than growing our economy. To make things worse they spending Trillions we do not have in their effort to gain even MORE control over the country, rather than growing our economy.

Add pictures here
✖
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 11/01/2010 10:29 AM, Mike Hunter wrote:

Tell that to Obama. Billions for bailouts but not one cent for middle class. Obama is just a liberal democrat statist.

No one said Obama was smart and congress was honest and realistics this time around. It is one thing we agree on.
As with net disposable income in the middle income at depression type lows, and bad credit, they can't spend more to create demand for products. Tapped out.
Yet vary few look at what costs them the most in life, government.

But we live in an Obama nanny state and that means government needs money for debt and nanny.
But I agree, people know how to spend their money better than government does.

Add pictures here
✖
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Motorsforum.com is a website by car enthusiasts for car enthusiasts. It is not affiliated with any of the car or spare part manufacturers or car dealers discussed here. All logos and trade names are the property of their respective owners.