China’s auto industry has 10-year golden period left

Chinese passenger vehicle industry has ended its high-growth, but will keep steadily high growth in the next 10 years, said Xu Changming, chief analyst in China National Information Centre on “2015 Auto-Tire Cross-Sectoral Development Summit Forum” held by Tireworld.com.cn on Jan.23 2015.

According to global auto industry development rules, it usually spends five years for a country to keep over 30% of sales growth, when the country’s passenger ownership increases from five units per thousand people to 20 units per thousand people, which is called crazy high growth period; it usually spends 10 years for a country to keep over 20% sales growth, when the country’s passenger ownership raises from 20 units per thousand people to 130 units per thousand people, which is called steadily high growth period.

Nowadays, China is still in the second period-steadily high growth period, said Xu. Due to unevenly income distribution, China’s second period will be extended to 16 years to 2024, and decrease sale growth to 13%-15%. In that case, China’s passenger vehicle industry will keep another 10-year of steadily high growth.

How big is China’s passenger vehicle market?

Someone doubts that China’s auto sales will be doubled in next seven years. Does China have such enough capacity to digest so many vehicles by 2024?

In America, auto ownership is 800 units per thousand people; In Japan and EU,it is 600 units per thousand people. So, in that case, it is calculated that China could consume 60 million units of vehicles per year in all, basing on 1.5 billion peple.

Statistics from China Auto Industry Association showed that China’s passenger vehicle sales reached nearly 20 million units in 2014.With growth of 13%-15%, China’s passenger vehicles sales will double to 40 million units by 2024. Adding to commercial vehicle sales, it would reach 60 million units of consumption capacity by 2024.

That’s why China has only 10 years for vehicle manufactures, said Xu.