While car ownership is up growth may dip in 2015
Motoring ahead Image: Faungg |
According to the Ministry of Public Security, China added a record 17m new cars on its roads last year, bringing total ownership up to 154m.
For the first time, automobile sales have replaced motorcycles as people's primary method of transportation, now standing at 58.6% of total motor vehicles compared to 43.9% in 2010.
There are now 35 cities that are home to one million cars, with ten that have more than two million. The number of people obtaining driving licenses also rose by 28m to 274m in 2014.
Beijing takes the top spot for passenger cars with 63 private cars per 100 households, almost three times the national average of 25 private cars per 100. Demand for locally manufactured passenger cars grew 20% year-on-year to 1.97m units in 2014.
However, auto consultancy LMC Automotive claims the growth of the sector was largely down to increasing dealer level inventory. The organisation questions whether the double-digit growth in passenger vehicle sales is robust?
Zhu Bin of LMC Automotive predicts that rising stockpiles will likely have a negative effect on wholesale growth in 2015 as dealers struggle to offload inventory. OEMs are also revising 2015 sales targets.
Bin estimates that there could be as many as 200,000 units going unsold in places like Shenzhen, which now has restrictions on car buying. A slowdown in GDP growth would also restrict sales.
Demand for light commercial vehicles will be particularly affected by National IV emissions standards that may drive auto buyers to low-speed trucks as yet unaffected by the regulations.