GM’s sales in China leapt 68% from a year ago, and the country’s 2010 car sales could exceed 2 million vehicles, putting it within striking distance of the 2.1 million vehicles sold last year in the U.S. Although it has to share revenue with local partners, GM could soon be selling more cars in China than it does in the U.S.
China’s car market is predicted to grow by 20% in 2010 after seeing a 45% rise in 2009. Total sales could be in the neighborhood of 16.5 million vehicles. Government incentives have gone a long way toward accelerating car sales, but even without that support, China’s rising middle class still has a lot more car shopping to do.
China has a car ownership ratio of 48 vehicles per 1,000 people, which is well below U.S. and European levels of 400-500 cars per 1,000 people. Neighboring Asian countries Malaysia and Thailand have a ratio of 200-300 cars per 1,000 people. Although the above photo of a Shanghai freeway at rush hour captures China’s well-developed traffic congestion, it seems safe to say that the Chinese are not expected to stop buying cars anytime soon.
GM is not the only automaker trying to cash in on the exploding Chinese market. Volvo has invested another $2.1 billion for factories and new model development, bringing its total China investment to just over $8 billion. Meanwhile, the Beijing International Auto Show has become a hotbed of possibilities, with domestic Chinese automakers unveiling 75 new vehicles, ranging from sedans to experimental green vehicles.
As China becomes a major consumer of automobiles, expect investment to grow and automakers to tailor more vehicles to that market.
