We knew that something was wrong with this month’s whisper number for Chinese car sales. If China’s largest carmaker, SAIC, improves by 23 percent , if Dongfeng is up 22.3 percent, then the total number will be somewhere in that neighborhood, and not “up by nearly 40 per cent over September 2009,” as it was rumored yesterday (no wonder we couldn’t find the official Xinhua release, it either had been withdrawn or it was never there.)
Now for the official number: Wholesale deliveries of passenger cars rose 19.3 percent to 1.21 million, the China Association of Automobile Manufacturers told Bloomberg in an e- mailed statement today. Total vehicle purchases in China, including trucks and buses, are up 17 percent to 1.56 million units, CAAM data say. When looking at these (for China) benign numbers, one has to keep in mind that in September 2009, sales of passenger vehicles had skyrocketed by 84 percentl all vehicles had been up 78 percent. Double digit growth on top of that is absolutely phenomenal.
For the first nine months, sales of domestically-made automobiles in China totaled 13.13m units, up 35.97 percent. Output was 13.08m units, up 36.1 percent, the CAAM says. To reach the 17m target for the year, the market must be up by around 25 percent, which now appears as entirely doable.
China’s top 10 reported sales of 11.3 million units for the first nine months, that’s 86 percent of the market. The remaining 14 percent are divided amongst 50 – 110 automakers, nobody knows for sure how many there are. Some companies are licensed carmakers, but don’t make cars, which is one of the reasons for the ongoing confusion.
Here are the nine month sales of the Top 10 in China. These numbers include the joint ventures held by the individual companies, for instance, SAIC includes GM and Volkswagen.
| Maker | Sales (million) |
| SAIC | 2.6500 |
| Dongfeng | 1.9000 |
| FAW | 1.8500 |
| Changan | 1.7200 |
| BAIC | 1.1000 |
| Geely | 0.5325 |
| Chery | 0.4753 |
| BYD | 0.3862 |
| Brilliance | 0.3758 |
| JAC | 0.3500 |
Source: CAAM
China is a market no big company can be without. Volkswagen just announced that in the first none months, 1.47m VWs were sold in China, a plus of 39 percent, a bit ahead of the market, Automobilwoche [sub] reports. GM’s sales in China for the first nine months of the year totaled 1,775,764 units, an increase of 37.4 percent from the first three quarters of 2009 . However, the big number (wisely not broken out in the release) is Wuling vans, and they are suddenly not doing so well. On a brand basis, Volkswagen rules China.
Isn’t there a huge danger that if the Chinese car market carries on expanding at this rate, China might not be able to secure enough oil to keep those cars going (along with the rest of its economy)?
It’s all very well having big car sales, but without the resources to back them up, it’s heading for a huge collapse. Russia only has x-amount of oil and it’ll need some for itself if it wants its own economy to flourish, the US will try to secure the Canadian tar sands for themselves (and I’m not ruling out arm twisting by the US government) and Europe will cosy up to Norway to exploit their oil supplies.
This just has “disaster” written all over it.
Agreed, the rate at which Chinese mass motorization is going is a recipe for disaster. Hundreds of millions of new car will hit the streets in the next decades and world oil production is already all but maxed out. The Chinese going electric could save the world from some very nasty competition for scarce resources but the problem for the Chinese is: if they can’t copy it they can’t build it.
The Chinese government is keenly aware of the energy problem and has introduced the highest electric cars subsidies in the world yet a company like BYD that attracted huge sums of investment money from Warren Buffett on a new energy vehicle ticket keeps coming up blanc. Not surprisingly I suppose from a company that made retro engineering it’s core business but it shows the extend of the problem.
It makes sense that the Chinese are now forcing western companies to share their EV technology with them if they want to sell cars in China. What I don’t get though why they feel they don’t have to pay for it but I guess the YouTube video explains all you need to know about how a society that’s all about taking works. In the end nobody wins…
Not only will energy resources be squeezed, but so will Chinese infrastructure. Granted, huge building projects move much quicker there than in the US, but even so, I don’t see what you could do about inter-city traffic short of razing entire blocks of buildings in order to widen the streets, and even then, you’ll probably end up with 20 lanes of gridlock instead of 10. Laying enough asphalt to accommodate the coming auto glut will require biblical amounts of money and materials.
See my comment here.
I’m not a China expert, but my guess is that typical Mercedes owner in China wouldn’t be concerned at all when the world oil price reaches $150 a barrel – if it weren’t for shortages.
The first problem is refining capacity. The second problem is refining motor fuels profitably.
What happens in China is that the state sets the street price of these fuels, especially diesel. When the costs of the raw material exceeds the mandated price of the refined fuel, as will be the case oil breaks a certain price barrier – then refineries essentially don’t have an incentive to increase capacity.
Some analysis of the “miracle” that is the unending double-digit Chinese GDP reports that a significant number of new auto sales are ending up being literally warehoused….central planning’s idea of keeping the engine running, along with massive public-sector infrastructure projects.
So maybe it’s all unsustainable (now that would be novel!) and projections of 40 million, let alone 75 million annual sales are just so much dreaming.
Change the channel when Glenn Beck comes on. That warehousing theory (to put it charitably) has been debunked a year ago. We are in China, not North Korea.