The world’s top car makers head to China this week for the Shanghai Auto Show, where they hope to cash in as the sector reels from last month’s earthquake and tsunami in Japan.
After two years of booming sales, the growth in China’s auto market - which in 2009 overtook that of the United States to become the world’s largest - tapered off to eight per cent year-on-year in the first quarter of 2011.
That slowdown - which still meant the sale of 4.98 million units - comes as Beijing winds back stimulus measures put in place to combat the global financial crisis and curbs the number of licence plates issued in the capital.
But analysts remain bullish about the market’s prospects, as the number of car owners is still relatively small compared with the country’s massive population.
“The centre of gravity for activity is clearly moving towards China,” Patrick Blain, president of the International Organisation of Motor Vehicle Manufacturers, told AFP earlier this month.
“One advantage that China has is its centralised economy,” said Carlos da Silva, a Paris-based analyst for Global Insight. “The periods of slowdown are also due to the government’s wish to avoid overheating,” he said.
About 2,000 car and parts makers from 20 countries will hawk their wares - showcasing 75 new models, 19 of them making their world premieres. A total of 1,100 vehicles will be on display.
Organisers are expecting 700,000 people to visit the show during the six days that it is open to the public, from April 23-28.
As the first auto show since the March 11 twin disasters in Japan, where a large number of auto components are made, Shanghai will also allow industry analysts to gauge the impact of the catastrophe.
“By mid-April, the slowdown in Japanese factory output has meant that 800,000 fewer cars were made there,” Da Silva said, adding that plants outside Japan were “just starting to suffer”.
The analyst estimated that by month’s end, 25,000 fewer cars would have been made in China, 55,000 fewer in Europe and 68,000 fewer in North America as a direct result of the crisis in Japan.
The show will also allow Chinese car makers to showcase their more upmarket vehicles that will pose a direct threat to foreign manufacturers.
“The Chinese builders occupy 30-31 per cent of the total market share. But in terms of revenue, they only account for around 17 percent,” John Zeng, an analyst at JD Power in Shanghai, said.
Published in The Express Tribune, April 18th, 2011.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ