Car counting conundrum

• Source: Global Times
• [09:34 January 10 2011]
• Comments

Toyota, the company's formidable Japanese rival, sold 846,000 vehicles in China in 2010, up 19.4 percent from a year earlier, the auto portal website gasgoo.com reported Wednesday, citing Beijing-based Toyota spokesman Hitoshi Yokoyama.

The figures have allowed the Japanese automaker to comfortably surpass its annual sales target of 800,000 units, the report said.

Toyota aims to sell 900,000 vehicles in China in 2011, albeit with a lower growth rate than in 2010, said Hitoshi Yokoyama, adding that China's automotive market will slow down this year.

GM's sales in China hit a record high of 2.35 million vehicles in 2010, representing a 28.8 percent increase percent year-on-year, the company announced Tuesday.

"GM kept pace with the needs of our customers by introducing 11 new and upgraded models that lead their segments in design, technology and fuel economy," Kevin Wale, president of GM China Group, said in a statement.

However, the Shenzhen-based Chinese automaker BYD Co missed its 2010 sales goal by more than 80,000 cars, despite slashing the target by a quarter in August, People's Daily Online reported.

The automaker, backed by US investment mogul Warren Buffett and focused on new energy vehicle development, sold 519,806 cars last year, 16 percent more than a year earlier, BYD said in a statement Thursday.

However, this growth still left it 13 percent short of the 600,000 unit target set in August. No reason was given for missing the goal.

Something must be done

The growth rate of car sales in China has been slowing since mid-2010 as the government began withdrawing stimulus measures aimed at cushioning the impact of the global financial crisis, AFP reported.

The government raised the purchase tax for small passenger cars to 10 percent starting this year, ending an incentive policy that had allowed China to become the world's top auto market in 2009.

Yet more limiting measures appear to be in the pipeline. The Beijing municipal government took the lead on December 23 by announcing a quota of 240,000 new vehicle license plates through a lottery system this year, with 88 percent of plates set to be allocated to individual buyers. More than 800,000 cars were sold in the capital city last year.

Other initiatives include higher parking fees, the banning of vehicles registered outside the capital from the city center and limiting each resident to owning only one car.

Analysts said the auto market in the whole country is likely to be affected as a copycat effect takes hold in other provincial capitals and municipalities.

Major cities such as Guangzhou, Chengdu and Hangzhou have considered similar measures.

"Once other cities follow Beijing's lead in restricting new car registrations, it will have a serious impact on automobile sales," Jia Xinguang, an independent auto analyst based in Beijing, told Asia Times Online.

Agencies - Global Times