Shandong On Internet
Shandong Introduction
Your Location:Shandong On Internet > News > China
Strong China sales spur automakers' global success

>As the world`s biggest market for automobiles, China has been the most important contributor to automakers` global success.

The country helped propel General Motors in the fourth quarter, though the US company posted a weaker-than-expected profit on Thursday due to wider losses in Europe and rising costs in North America.

The results contributed to a third consecutive money-making year for GM, which is battling Germany`s Volkswagen to retain its status as the best-selling foreign automaker in China.

The company said adjusted earnings before interest and taxes for international operations — mainly in China but also Russia, India and a few other countries — jumped 25 percent to $500 million in the quarter ended Dec 31. 

For all of 2012, GM outsold Volkswagen in China, with record sales of its Wuling minivans. Deliveries at GM and its Chinese joint ventures rose 11 percent to a record 2.84 million vehicles. At Volkswagen, deliveries were up 24.5 percent to 2.81 million. In the fourth quarter, GM deliveries in China increased 15 percent to 754,000. 

Although China`s passenger vehicle sales growth slowed to 6.8 percent in 2012 from more than 30 percent two years before, the increasing demand for automobiles made the country the largest single market for both GM and Volkswagen.

Moreover, in 2012, GM and Volkswagen increased market share as Toyota, Honda and Nissan dealt with anti-Japanese sentiment tied to a territorial row with China. In 2013, with 95 auto brands continuing to fight for their share of China`s market, vehicles sales in the country are expected to top 20 million for the first time.

GM and its Chinese partners captured 14.3 percent of the market in the latest quarter.
>"China`s been very critical for GM," said David Zoia, editorial director of WardsAuto, an industry information website. "During the 2009 downturn and bankruptcy, when things were at their worst in North America, China was carrying the ball for GM. The potential that is still there makes it even more critical to them."

Zoia pointed out that GM achieved its status as the top-selling foreign automaker in China despite entering the market after Volkswagen. He credited the US company`s Chinese joint ventures, which accounted for 9.1 percent of international revenue in the fourth quarter, up from 8.4 percent, according to GM. 

China sold 19.1 million passenger vehicles in 2012, for the first time overtaking Europe in total vehicle sales and now in pole position after passing the United States in 2009. 

Last year, European passenger vehicle sales reached 12.5 million units, 1.1 million fewer than a year earlier, and the US registered 13 percent year-on-year sales growth, the best since 2008, but it still lagged just behind the Chinese market after selling 14.5 million units.

Analysts said China`s vehicle market will continue to grow. By 2020, the number is expected to rise to 33 million.

The market could be as big as Europe and the US combined, Ferdinand Dudenhoeffer, head of vehicle research at the University of Duisburg-Essen, predicted earlier in January.

"It`s a huge market, and one nobody can ignore," Zoia said of China. "All companies have their eyes on it."

While GM has racked up Chinese sales with its Chevrolet and Buick nameplates, it is making a deeper push into the luxury market there. Last year, it introduced China to the Cadillac XTS luxury cruiser, which targets a more upscale buyer. GM has said it will produce some of the vehicles locally through its joint venture partner, Shanghai Automotive Industry Corp.
>Tim Dunne, director of Asia-Pacific market intelligence at consumer-research firm JD Power and Associates, said China has been "very important" to GM ever since the company began investing heavily there in the late 1990s.

"At the time, Chairman John Smith said GM needed to do anything necessary to get into China," Dunne said. 

While US automakers are technically capable of creating significant sales in China, he said, uncontrollable factors such as economic upheaval, political issues or an earthquake can affect performance.

"Nobody wants to lose China," he said. "Once you get out of that market, then things become even more difficult."

Global research and consulting firm KPMG said in a survey released in January that China is the top investment destination for global automakers due to its robust domestic demand.

"China remains a highly attractive market due to its long-term growth potential. It`s no surprise that automakers are placing more big bets in China, and doing so ahead of the other markets," said Andrew Thomson, Asia-Pacific head of automotive and a partner of KPMG China.

The global listing of luxury vehicle brands is another perfect illustration of China`s importance to foreign players.

German luxury car brand Audi`s global success is greatly attributed to its prosperous sales in China — its largest market in the world — as it has almost exclusively controlled the nation`s high-end official car market since it locally produced its flagship model, the A6, in 1999.

Its image as an official car boosted its sales and helped Audi for years beat its rivals, BMW and Mercedes-Benz, to top China`s luxury car market. 

The dominant leadership in China even helped Audi maintain the world`s No 2 position in the sector for two years, behind BMW and followed by Mercedes-Benz.
 
Date:2013-2-16 10:18:05     
Most popular