DETROIT — China's vehicle market — already the world's largest — is likely to double in size to 40 million units over the next decade, a senior Chinese auto executive predicted.
Dazong Wang, president of Beijing Automotive Industry Holding Co., said at the Automotive News World Congress that annual sales of cars, buses and heavy trucks may total 40 million units by 2020, up from 18.3 million units last year.
That would entail annual sales growth of 11 percent, Wang noted, or less than half the 24 percent annual growth rate of the past decade. “I really believe 40 million units is realistic in 10 years,” Wang said.
If the projection comes true, nearly half of global vehicle production would be concentrated in China, Wang said. But he does not expect China to emulate Japan and transform itself into a major vehicle exporter.
“You will see Chinese products on a global stage, but [Chinese automakers] won't be like Japan. China will account for 50 percent of the world's sales volume,” so automakers will produce vehicles in China for the domestic market, Wang said.
Over the past decade, prosperous Chinese coastal cities such as Shanghai and Guangzhou have spurred auto sales. Now, China's less prosperous inland cities are spawning a growing middle class. Previously, price-sensitive customers in inland markets preferred low-priced cars sold by domestic Chinese automakers such as Geely Automobile Holdings Ltd. and Chery Automobile Co.
Now, international automakers are targeting these markets. Last year, SAIC-GM-Wuling — a three-way joint venture formed by General Motors Co., Shanghai Automotive Industry Corp. and Liuzhou Wuling Automotive Co. — introduced its new Baojun brand, which will feature low-priced cars targeted at China's inland markets.
Terry Johnsson, vice president of GM's China operations, told Bloomberg News in November that GM expected 60 percent of its China sales growth would occur in these inland regions in five years.
Likewise, BAIC is banking on major sales gains, Wang said. The Beijing-based automaker expects to double its annual sales to 3 million units by 2015. “We want to be a global company,” Wang said.
“We want to double our sales to 3 million units, and possibly more.”