China’s automobile sale that is already on top of the world will increase by 7% this year as predicted by the China Association of Automobile Manufacturers on Friday.
“The purchasing power of Chinese auto customers is pretty good,” said Zhang Xin, an industry analyst for Guotai Jun’an Securities in Beijing. “Growth in 2013 could be even better, even without any stimulus. And the new government also is advocating expanding domestic demand.”
According to the Association, sales will jump to 20.6 million units in 2013 while the previous year’s record was 19.3 million. Shipments increased 4.3% last year from the year 2011. On the other hand, U.S. auto sales increased 13% to 14.5 million last year that is the best since 2007. China left U.S. behind as the leading automobile market by the number of new vehicles sold in 2009.
China’s booming growth is also good news for the other overseas automakers, who have invested a huge amount in the country, such as Ford and GM. Ford reported an annual record in China in 2012 with the sale of more than 626,000 vehicles wholesale.
Improved and favorable economic climate and export demand are among the potential future of automobile market in China in 2013. The country exported about 1.05 million cars last year showing an increase of 29.7% from a year earlier.
“The macroeconomic rebound has laid a good foundation for the auto market, and the trend of urbanization will make demand firm over the long run,” Shi Jianhua, CAAM’s deputy secretary-general, said in a statement.
Despite of increase in sales, Chinese automakers are spending less amount, i.e. less than 2%, of revenue on research and development or nearly half of the global average, according to Dong Yang, secretary general of the auto association. He said that the government should offer incentives to support research and they should adopt local brands for official use.None found.