Frowns in Berlin, smiles in Beijing
- Source: Global Times
- [08:32 October 19 2009]
- Comments
So it is good for Stadler that he can look forward to the strong possibility that in 2010 China will become the world's largest car market.
When he is driven from the airport to downtown of any large Chinese city, as he was in Shanghai last April, he experiences first hand what some auto-centric social scientists have called the "Chinese Audi A6 phenomenon."
The model is easily seen cruising city streets and highways alike – particularly the China-only stretched "L" version popular with many Chinese drivers.
Volkswagen opened its initial Shanghai joint venture company in 1984 and its subsidiary Audi drove into China in 1986, and both are realizing the benefits of an early start. Since the beginning of 2009, Audi sold more than 109,000 vehicles in China, one fifth more when compared to the same period a year ago.
"The world auto war will be won or lost in the Chinese car market," Ivo Naumann of Shanghai-based consultancy firm Alix Partners told the Global Times. Audi, Daimler, BMW – all the big German car makers – have reported record sales in China for the third quarter while their markets in Germany and Western Europe are still shrinking.
This year, Daimler will sell more vehicles of its top-model "S-Klasse" in China than in the US. Every fourth car on a Chinese street is built by a German brand. Roughly the same market share is held by Japanese car makers.
Volkswagen, with its two joint-ventures Shanghai Volkswagen und FAW-Volkswagen, is still the unchallenged market leader with a share of around 20 percent (including the subsidiary Audi) and has reported an almost unbelievable growth rate of 62 percent in September, compared to the same month last year.
"China's passenger cars experienced an unexpected high growth," crowed Volkswagen-China President Winfried Vahland. And there are many future buyers waiting.
At the Tokyo Motor Show recently visitors admired new models from the only overseas brands in attendance, Lotus and Alpina – all the other Western brands cancelled their attendance. What a difference from six months ago at the annual Chinese auto fair in Shanghai where Volkswagen CEO Martin Winterkorn was shaking hands with Daimler CEO Dieter Zetsche, and Wendelin Wiedking, then head of Porsche, was giving a big smile to the cameras.
"China is the world's only still growing important car market," Arndt Ellinghorst, automotive-analyst at Credit Suisse, told the Global Times.
By 2020, Ellinghorst expects car ownership in China to reach 148 cars per 1,000 residents, surging five times from current levels. "It is all about growth," said Ellinghorst.
The analyst asserted that based on 2007 income levels and assuming financing is available, two of five urban households can now afford a medium-priced car, while 90 percent of rural households can afford the lowest-end economy car.
"Compared to earlier developing countries like Japan in the 1960s or Korea in the 1980s, the growth of the Chinese car market is still relatively slow," said consultant Naumann. According to his analysis the necessary annual available household income for buying a car is around 65,000 yuan ($9,520).
