China’s December surge makes it largest auto market

Euroautos Jan11.pngDecember was a good month for global auto sales.

China’s volume jumped to 1.3 million, as buyers rushed to capture stimulus discounts before they ended. In Beijing, many ‘brought forward’ planned 2011 purchases, in order to beat the new quota system, which aims to reduce congestion by capping 2011 sales at just 240k versus 891k in 2010.

Overall, this meant China became the largest auto market in the world, with sales of 13.76 million. Its volume has doubled from 6.7 million sales in 2008, due to government stimulus policies. But local opinion is divided about whether this pace can be sustained.

Most expect growth to slow to around 10% in 2011, although some forecast a short-term decline in sales. And there are also suggestions that manufacturers will now need to target the 4th and 5th tier cities, with different business models, rather than continuing to focus on the major cities.

Meanwhile, as the chart shows, Europe lost its 2009 position as the largest market. Sales overall were down 6% at 13.36 million, still well ahead of the previous leader, the USA. But Q4 saw volumes down 9% following the end of stimulus measures. Overall, operating rates in Germany, the largest market, are now back to 85%, versus 62% in Q2 2009.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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