Car companies take caution in anticipation of slow 2011 sales

With 2011 already upon us, there is an ever-increasing risk of automobile sales tapering off. Despite the boom season at the end of last year, seeing long lines of eager customers wanting to drive off with the hottest-selling vehicles, those within the industry are relatively more pragmatic in planning for the new year. Companies are more cautious than last year, with a few enterprises designation 2011 as an adjustment year. A majority of companies said that, compared to this past December, this season the automobile market may experience negative growth. 

Joint venture enterprises decrease 2011 business

"I predict that that annual growth will be around 15 percent," said Shanghai GM's CEO Ding Lei. With his company leading in annual sales, Mr. Ding is also taking a more prudent approach towards this year's plans. He said that the past two years have been abnormal and already exhausted the market. Additionally, due to predicted inflation this year and the phasing out of preferential policies, it is already indisputable that 2011 will see the end of rapid growth.

Chen Wansong, CEO of Shanghai Volkswagen's Huanan district said, "I believe the market will still grow, but that the rate of growth will not be as fast as in the past two years." Although Mr. Chen was unwilling to quote an actual figure, Shanghai VW's monthly sales plans are much more pragmatic than last year's.

Shanghai GM and Shanghai VW are not the only companies holding this opinion, as other joint ventures are also adjusting their sales targets. Tianjin FAW Toyota and Shanghai VW are setting their growth rates for this year to under 15 percent. In the past few days every major company released their production and marketing plans. Tianjin FAW Toyota's 2011 sales goal is 550,000 units, an increase of 10 percent increase, while Dongfeng Nissan's is 772,000 units, a 28.7 percent increase. Meanwhile, Mazda's Chinese sales goal this year is 28,000 units, representing an increase of 20 percent. "This is a signal that the direction joint enterprises are taking is towards adjustment," a joint enterprise brand dealer said.