The growth of China auto market might keep being 10% instead of increasing rapidly

Corresponding to new state of Chinese GDP increasing by 7%, the growth of passenger car sales would keep being 10% in the future. The joint venture auto enterprises still contribute most to the profit of group business and 3 &4 tier markets might be the only way out for self-owned brand auto enterprises.

In 2015, how to make products competitive becomes the core topic in auto industry. With the release of financial statements of listed auto enterprises in China, the performance has become very hot. At this point, Mr. Xu, the director of Department of Chinese Information Resource Development, told reporter the growth of 8% to 10% would keep for around 10 years under the background of anti-corruption, intensifying the reform and economy deceleration.

According to the experience and laws of global auto market, there are totally 2 rapid growth periods. One is high-speed growth period, which might last for 5 years and the annual growth of sales volume is around 30%, from 5 cars per 1,000 people to 20 cars per 1,000 people. The other is smooth growth period, which might last for 10years and the annual growth of sales volume is around 20%, from 20 cars per 1,000 people to 30 cars per people.

Mr. Xu said to reporter, "The growth should decelerate in 2009 and 2010 from 2003 but auto sales volume was doubled in those 2 years due to stimulus policies of government. The growth should be between 10% to 12% from 2010 and 8% to 10% from now. The market trend is still fierce competitiveness this year."

There is general loss among self-owned brand auto enterprises such as Jinbei Auto, FAW Xiali Auto and Beijing Auto. On the contrary, joint venture auto enterprises still contribute most to the profit of group business such as Beijing Benz, Beijing Hyundai and Changan Ford etc. 3 &4 tier markets might be the only way out for self-owned brand auto enterprises.