Chinese car sales were strong this year, increasing by 34.1% in the first 11 months of this year according to the China Association of Automobile Manufacturers and the WSJ. But those numbers have largely been driven by government incentives on cars with 1.6 liter engines or smaller, a segment that accounts for some 70 percent of the passenger car market. But, according to the CAAM

China will likely extend one incentive for small-car purchases–a cash subsidy of CNY3,000 a car for purchases of certain fuel-efficient vehicles with 1.6-liter or smaller engines. The purchase tax for small cars, however, will likely rise to 10% from the special low rate of 7.5% currently

Moreover, some cities (including Beijing) could start regulating the number of car puchases allowed, and this combined with a reduction in subsidy levels could cause sales to start declining.

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Last year in October, I predicted that China would overtake the U.S. in car sales in 2009. The comments could not haven been more uncomplimentary. By the end of 2009, China did beat the U.S. 13.6 to 10.4.

A while ago, I cautiously predicted that this year, China would break the U.S. all time record from the year 2000. The comments were far less incredulous this time around, the discussion instead turned into the tired fascist elephants against communist donkeys discourse. Now it is official what the attentive TTAC reader has known all along: China will break the current record of 17.4 million units from 2000 in the U.S. Read More >

Passenger car sales in China jumped 29.3 in November as people rushed to lock in incentives set to expire at the end of the year. Demand will most likely be even stronger in December. In November, the end of the incentives was just a rumor. A few days ago, the end of government handouts became official, and  dealers already ran out of cars. Read More >

TTAC has been keeping an eye on China’s near-monopoly on the rare earth compounds required to build hybrid and electric cars for some time now, and we’ve seen the materials become an increasingly controversial issue, culminating in this year’s diplomatic tiff between China and Japan. But, as Bertel has pointed out,

That the Chinese have a stranglehold on rare earth is not because they are the only ones who are are sitting on it. It’s due to laziness and lack of money.

Now, Toyota Tsusho (a partially-owned subsidiary of Toyota Motor Company), has announced plans to stop being lazy and spend money on a rare earth materials plant in the Indian state of Orissa. Tsusho says the factory should come online in 2012, and should produce 3,000-4,000 metric tons of the magnet-hardening materials. Meanwhile, Japanese firms aren’t limiting their search for rare earth materials to India. Bloomberg notes

The shortage in rare earths has brought delegations from Canada, Mongolia and Bolivia to Japan in the past two weeks as these countries promote themselves as alternative sources to China.

GM’s attempt to sell cars via eBay resulted in 45 cars sold in the first nine days. A month later, the idea was abandoned. I wonder why. A few weeks ago, Kia said they would try eBay. No word yet on any results. Now, China’s Geely joins the on-line fray. Read More >

Whenever I talk to Chinese carmakers, they dream of going to Europe and the U.S.A. I tell them that GM, Volkswagen, Daimler, BMW et al would be dead, would they not have gone to China. “Why do you want to go to markets that are not going anywhere?” They still want to go. “Why to you want to enter a cage of wounded lions?” They still want to go. And here they go again: Chery shows its DR3, a four-door hatchback, known in China as the Fulwin2, at the Bologna Auto Show from December 4 to 12. They want to take it to the European market in June next year. Read More >

It was supposed the car that changes the game. The BYD F3e was touted as an EV with a range of 300km (186 miles). It was supposed to have a miracle battery with a recharge-time (to 70 percent) of only ten minutes. At the same time, it promised a top speed of 150km/h (93 mph) and a 0 to 60 mph time of less than 13.5seconds. What’s less, the car was supposed to cost no more than $22,400. And the government was willing to grant generous subsidies. How can you go wrong with something like that? You can: That car will not see the light and is being aborted by its Chinese parents. Why? Read More >

China’s car dealers will be mobbed tomorrow, and the run on the lots will last until the end of the year. Shanghai Daily [sub] reports that it is now – semi – official that the Chinese government “will cancel the preferential purchase tax for vehicles with engines under 1.6 liters on January 1 next year.” Shanghai Daily has it from Xiaoxiang Daily News, which heard it from an unidentified official with the National Development and Reform Commission. But it will be enough to incite a stampede to lock in the savings while they last. Read More >

Note to those who comment “slow newsday?” whenever there is something that can be construed as even mildly uncomplimentary towards GM (sorry if you bought the stock.) You are right. The newsday must be glacial. First, the Freep’s investigative reporters unearthed a slowdown at Toyota. Now, the crosstown competition at the DetN found GM’s super-secret car of the future. Stop press! It will be that epic fail, formerly known as the Segway. Read More >

Beijingers who shop for a car increasingly find themselves SOL. Dealers report a shortage of cars. Especially scarce: inventories of Volkswagens, China’s largest passenger car brand. “I have to turn to another auto brand for not being able to get a single car of Volkswagen’s for five months,” a customer named Li Guang complained to China’s Global Times. The paper reports delivery times of 3 months for China-made Polos, Sagitars (formerly known as Jetta) and Magotan (known as the Passat B6 in other countries.) Now, Beijing’s car dealers are pouring more oil on the fire. The rumor mill is ablaze with talk that Volkswagen might postpone its car supply to Beijing’s auto market for January next year, because Beijing might launch new car registration limit policies at that time. The result? Read More >

Good news, bad news times at Toyota. First, the bad news. Read More >

The year is slowly coming to an end. Only one month to go. China’s industry association CAAM is no doubt looking at early reports of the November sales (official numbers will be released in a week or so.) That look emboldened the CAAM to come to a semi-official prediction: “China is expected to record auto sales volume of more than 17 million units this year” said the China Association of Automobile Manufacturers (CAAM), according to Gasgoo. Read More >

Just two short years ago, Volvo’s press flacks were talking a big game about Volvo’s luxury aspirations, saying things like

We want to continue to compete with Mercedes, BMW and Audi. We’re working to improve the premium-ness of the brand and our products.

Even as recently as this year, Volvo execs have made much of the need to “not damage the Volvo brand.” But, having been bought by the Chinese automaker Geely, the Swedish brand has changed its tune. Autocar quotes Volvo’s new CEO, Stephen Jacoby, saying

Let’s ditch this talk about premium. It sounds like a pricing strategy and it’s got an expensive ring to it. We need to focus on elegant Scandinavian simplicity, our own unique identity, and not copy our competitors.

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So who will be he big Chinese EV producer when the Chinese start buying EVs in earnest? It more and more doesn’t look like BYD. It could be staid old BAIC, Beijing’s partner of Hyundai and Mercedes. Read More >

People have accused me of irrational exuberance (or worse) when I mentioned that the Chinese auto market could be 17 million or thereabouts this year. Impending bubbles were predicted. Popping bubbles were (erroneously) reported. Gordon Chang, guest of Glenn Beck whenever Beck needs an Asian that says something nasty about China, even offered the theory that the Chinese government  secretly buys most of the cars and hides them somewhere. (For 17 million, the Gobi desert would come in handy, but then there’s Google maps.)  I stuck by my prediction of 17m or thereabouts.

Well, it turns out I was wrong after all. Read More >