China Overtakes Sluggish Europe in Car Sales

[haidian]

China Overtakes Sluggish Europe in Car Sales
January 03, 2013 | 12:52 PM

Chinese consumers bought more cars than their European counterparts in 2012.

While European consumers spent much of 2012 fretting about the economic crisis, China managed to surpass the Continent in automobile sales for the first time. Given China's growing middle class, the trend looks set to continue. China will probably outpace Europe in vehicle production this year, too.

It's no secret that Europe's automobile industry isn't exactly booming. Several carmakers on the Continent are struggling as demand has fallen off during the euro crisis, particularly in southern European countries, where austerity programs have taken a bite out of prosperity.

In China, however, more and more cars are flying off the lots. And in 2012, for the first time ever, Chinese consumers purchased more automobiles than did buyers in Europe, according to the daily Süddeutsche Zeitung, citing an unpublished report by Germany's VDA automobile industry association. The report indicates that whereas 13.2 million cars were registered in China in 2012, in Europe, the total fell from the previous year's 13.6 million to just 12.5 million.
The reasons, of course, are many. On the one hand, China's middle class continues to swell rapidly, even as the economy there grew more slowly last year than it had in previous years. For the increasing number of those who can afford them, cars offer both greater mobility and an important status symbol.

On the other hand, car sales in Europe have long been the canary in the economic coal mine. With several euro-zone member states in recession, and few countries enjoying anything more than modest growth, consumers appear to be waiting for better times before replacing aging vehicles. Indeed, despite a brief upturn in many EU member states in 2009, car sales in Europe have been falling steadily since 2007.

As Big as US and Europe Combined

These trends -- and particularly the ongoing expansion of the Chinese market -- are likely to continue. "It is just a question of time before China surpasses the US in car sales," Ferdinand Dudenhöffer, head of the Center Automotive Research at the University of Duisburg-Essen, told the Süddeutsche Zeitung. He predicts that, by 2030, the Chinese car market could be as big as that of Europe and the US combined.

The car sales boom in China, however, isn't just beneficial to Chinese automakers. German brands, for example, sold more new cars in China in 2012 than they did in Germany. Furthermore, many of the vehicles sold in China are the product of collaborations between European or American brands and a Chinese company. According to the Süddeutsche, only about a third of the cars produced in the country are the product of a purely Chinese company.
Nevertheless, many European brands are suffering as consumers on the Continent kept the hatches battened down in 2012 and are likely to continue doing so in 2013. Several companies, such as Ford Europe, Renault and Opel are struggling mightily. PSA Peugeot Citroën is currently slashing some 10,000 jobs, and its financing business is expecting a €7 billion ($9.2 billion) bailout from Paris.

In fact, according to a Financial Times projection published on Tuesday, China is also expected to leapfrog Europe in the total number of cars and light vehicles produced in 2013. The paper estimates that China will make 19.6 million cars and light trucks this year against 18.3 million in Europe, giving it a likely 23.8 percent share of the global car-manufacturing market. In 2000, China's share was just 3.5 percent. During roughly the same time period, Europe's share of the global market has dropped from 35 percent in 2001 to a projected 2013 share of just over 20 percent.

 

[haidian]

China to outstrip Europe car production
Financial Times
By Peter Marsh, Chris Bryant and Richard Milne, FT.com
January 2, 2013 -- Updated 0035 GMT (0835 HKT)

(Financial Times) -- China is poised to produce more cars than Europe in 2013 for the first time, hitting a landmark in the country's rise in the automobile industry and underlining the difficulties for the European vehicle sector as it faces a challenging 12 months.

China is in 2013 set to make 19.6m cars and other light vehicles such as small trucks compared with 18.3m in Europe, according to projections prepared for the Financial Times by five forecasting groups.

The rise of China is even more striking considering the projections for Europe include not just the European Union but other nations such as Russia and Turkey.

In 2012, on the basis of motor industry estimates, Europe made 18.9m cars and related vehicles, comfortably ahead of China's tally of 17.8m.

The projections are based on data from the IHS, LMC Auto and PwC consultancies together with investment banks UBS and Credit Suisse. They paint a picture of only a slight recovery in 2013 for the world car industry, where output is expected to climb by a muted 2.2 per cent in the coming year, as against 4.9 per cent in 2012.

With global sales valued at about $1.3tn a year, the car industry is one of the best bellwethers of world economic conditions.

According to the data, Europe will in 2013 make just over a fifth of the world's cars -- a figure that is well down on the 35 per cent it recorded in 2001. In 1970 nearly one in every two cars made in the world originated from a factory in Europe -- which is generally recognised as the place where the global auto industry began with the unveiling of a rudimentary three-wheeler in 1885 by the German inventor Karl Benz.

Car production in China in 2013 is likely to be 10 times higher than in 2000 -- when its share of global auto manufacturing was just 3.5 per cent as opposed to a likely 23.8 per cent in 2013.

Scott Corwin, an automotive expert at the Booz & Co consultancy, said that even with relatively strong growth projected in vehicle output and demand in both the US and China, "these markets alone won't do much to pull [the whole world] forward".

Mr Corwin also cautioned that even with a continuation of the recent rise of the car industry in China, many vehicle markers doing business there "are struggling to make much money" as a result of tough competition and the fact that the market is made up of large numbers of small cars, for which profit margins for manufacturers are small.

Europe's expected fall in production is in response to a steep decline in car sales throughout the continent since the 2008/09 financial crisis, with the problems causing severe difficulties at a number of large vehicle makers, notably France's PSA Peugeot Citroën, which is cutting almost 10,000 jobs and is lining up a €7bn rescue package for its financing arm with the French government.

Most car markers with strong positions in the European vehicle business are braced for a turbulent period ahead. Norbert Reithofer, chief executive of the German luxury carmaker BMW, said he expected conditions for selling cars in Europe would remain "very challenging" in 2013. Håkan Samuelsson, chief executive of Volvo Cars of Sweden, said: "[As for] the [European car ] market, you can only pray."

List of countries by motor vehicle production

 

[Korean]

Foreign brand cars have more than 70% market share in China.

Thus when we talk auto sales in China, we are talking about American, German, Korean, and Japanese brand cars, not Chinese brand cars.

 

[haidian]

Chnia has a vast industrial and manufacturing base,that's a huge advantage for future defence industry.

 

[northeast]

Don't post too many economic news here please，It's a defence forum.

 

[Protocol man]

Awesome. Not even a continent the size of Europe can touch us.

 

[haidian]

China Vehicle Sales Beat Europe And U.S. Again
1/10/2013 @ 1:45

After surpassing the U.S. in 2009, China has now taken a turn ahead of Europe to be the world’s largest automotive market.

Sales of passenger vehicles rose 6.8 percent in China from the previous year, hitting 14.68 million units, according to the China Passenger Car Association. The group said Wednesday that December sales rose 8.6 percent year-on-year to 1.56 million units.

Meanwhile, European passenger vehicle sales reached 12.5 million units lastyear, 1.1 million fewer than the multinational automakers sold in 2011. And in the U.S., 14.5 million units were sold.

China’s vehicle market will continue to grow and could be as big as Europe and the U.S. combined, Ferdinand Dudenhoeffer, head of vehicle research at the University of Duisburg-Essen, told the German newspaper Sueddeutsche Zeitung.

Rao Da, secretary-general of the China Passenger Car Association, told China Daily today that the market “would probably yield about 30 percent growth year-on-year in January.”

China’s continued car boom bodes well for U.S. automakers.

General Motors (GM) sold 2.55 million units in Dec. 2011 and the numbers for Dec. 2012 will be proportionally higher. GM reported 2011 sales growth in China of 14.7 percent. Ford (F) is a much smaller player in China, but the brand recorded sales of 70.510 units in December, up 43 percent from a year ago. Last year, sales for Ford and its Chinese partners rose 21 percent to 626,616 units.

While the companies are turning around in the U.S., the market is taking a beating in Europe for the Detroit A-list.

GM saidit expects auto sales in Europe to fall 4 percent to 5 percent in 2013 from 2012, when sales were the weakest in nearly two decades. Also, in the third fourth quarter, Ford raised its forecast of loss in Europe in 2012 to $1.5 billion, from $1 billion it projected in the third quarter. That’s double the forecast Ford made earlier in the year as Europe’s economic woes take its toll on the company.

China’s growth will eventually pick up the slack for lackluster and slow growing markets in the core economies.