In what was seen as a turning point for the company, GM last year sold more cars in China than in the United States, and the gap is only expected to widen as an increasing number of Chinese grow rich enough to purchase their first car.
By contrast, Ford and Chrysler are relatively late coming to the China market, and their brands don’t even fall in the top ten for sales.
And despite the Chinese government’s efforts to slow the economic growth rate to calm inflation, and even though some cities, like Beijing, the capital, are putting new restrictions on private car registrations to ease congestion, GM’s top official here isn’t worried about a slowdown in sales anytime soon.
“Simple economics say it will” continue, said Kevin E. Wale, president and managing director of GM China Group. China’s economy “is growing between 8 and 10 percent,” he said in an interview at the company’s sprawling campus in Shanghai’s industrial zone. “We don’t see that trend here changing in the next 10 years or so.”
He said he sees the demand for vehicles in China growing 10 percent to 15 percent a year for the next five years at least.
“Even with the recovery in the U.S., the Chinese market is going to be significantly greater than the U.S. market,” he said. “For everyone, China is the most important market. It is the fastest-growing car market in the world.”
How fast is it growing? “It will be greater than the combined growth of the next seven or eight largest markets,” including Brazil and Russia, Wale said. “It’s the big gorilla out there.”
Auto industry analysts agree. In its demand for passenger cars, they say, China today is comparable to the United States in the 1950s, which saw the building of the Interstate Highway System and the explosion of automobile ownership by American families, who came to see driving not only as a means of transport but also as a leisure activity for weekends and holidays.
Current car sales in China – more than 3.3 million passenger vehicles sold in just the first three months of this year – are considered just the tip of the potential demand, since most new vehicles are sold in Beijing and in the major cities along the prosperous east and southern coasts.
The hallmark of China’s growth today is the spread of wealth into what are known as the third- and even fourth-tier cities – places with populations of more than a million people. As the country’s affluence slowly flows inland, more Chinese are moving into the middle class, and the demand for new cars is expected to grow – particularly lower-end, entry-level cars for first-time buyers.
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