• AMERIGO International

The Chinese market bends but does not break

The Chinese market is the world’s largest market with more than 25 million cars. In this market, western, Japanese and Korean manufacturers have been dominated for a long time, the majority of automobiles being produced by joint ventures between Chinese and foreign manufacturers.

For several years, however, Chinese manufacturers have been growing. Dominant on heavy trucks. In recent years, restructured and growing, private vehicles are progressing in two main segments: cheap SUVs and electric vehicles, enjoying strong support from the Chinese authorities. To this market has bee

n added for several years a dynamic of imported vehicles facilitated by the decline in tariffs initiated since the early 2000s. The Chinese market has become the first market for brands like Range Rover, Porsche, Bentley


But 2018 is a new year.

After a fall of 11.7% in October, car sales could be down the whole year. A first for decades.

The auto sector is one of the biggest sectoral decline in Europe, Beijing stopping hopes of lower taxes on the purchase of cars, to boost the slowdone demand. The Chinese government’s planning agency said it had not planned to halve the vehicle purchase tax on the world’s largest car market.


But, in fifteen years, the local sales have been multiplied by 25! On the other hand, a volume of transactions that pushes all other markets for small players. In 2017, nearly 25 million new cars were sold in China. China’s car factories assembled 29 million vehicles in 2017, including 24.8 million private cars. In the top 10 most sold brands, five are Chinese … and the other five are working with a Chinese manufacturer.


At the same time, 100% electric cars were up for 468,000 registrations (+ 82% compared to 2016!). And as China has set quotas (12% of electrified vehicles in 2020) and in turn plans to ban thermal vehicles – without having set an ultimatum – it is clear that sales of hybrids and electric will rise in China.


And this is just the beginning: « We think China is on Day 1 of an electric utility revolution, » said Shen Haiyin, co-founder of Singulato. Its future factory is just starting to emerge in the Chinese province of Hunan, but start-up Singulato Motors has big ambitions: to assemble 50,000 electric vans a year to take advantage of the growing demand in China for commercial vehicles and electric trucks.


The weak growth of the Chinese car market in 2017 should not mask the movement of the background: China is hungry for automobiles, gigantic coastal cities or the interior of the country. By 2030, the McKinsey Cabinet expects a market of more than 40 million annual units, representing more than a third of the global market. Also, China is already attacking the electrical market, perhaps to dominate it.