China’s automobile market will nearly triple in size to 40m and account for half of world production by 2020, according to one of the country’s top producers.
Beijing Automotive Industry Holding, China’s fifth-largest carmaker by sales and market share, also said that it expected its own sales to double to at least 3m units within five years.
"I personally believe that 40 million is realistic in ten years”, Wang Dazong, BAIC’s president. “Half of world production will be in China in 10 years”.
Speaking at a conference organised by Automotive News, the trade publication, Mr Wang said: “Over five years, our sales should at least double to 3 million units, and possibly more”.
Chinese passenger car sales reached 13.8m last year, surpassing the US – formerly the world’s largest vehicle market – for the second year running.
Estimates of how fast China’s car market vary widely and its growth has in the past surprised analysts on the upside.
"I don’t think it’s inconceivable”, Calum MacRae, an analyst with PricewaterhouseCoopers, said of Mr Wang’s forecast of 40m cars by 2020. “It depends on what China’s government does and whether it takes steps to prevent overheating in the economy”.
BAIC has carmaking joint ventures with Hyundai Motor and Daimler’s Mercedes-Benz division, and a truckmaking JV with Daimler.
The company last year bought three vehicle platforms from General Motors for $200m for outgoing models of its former Saab brand’s 9-3 and 9-5 models, and engines and transmissions.
In 2009 BAIC made an unsuccessful €660m bid for a stake in GM’s European Opel business, which the US carmaker later decided not to sell.
Despite warnings of a slowdown, China’s burgeoning car market has been a leading topic at this week’s North American International Auto show in Detroit, as are electric and hybrid vehicles, an emerging technology in which the country’s government and industry is seeking to leapfrog overseas carmakers.
Hong Kong-listed BYD, which produces electric cars and the batteries that run them, is among the carmakers exhibiting at the show.
However, BAIC’s president said that he expected that within five years new-energy vehicles would account for about 150,000 unit sales a year, or about 5 per cent of the company’s total sales volume.
"When you’re talking 40 million [cars] a year and 15 million from India, energy will become a problem”, Mr Wang said. “At the same time, we realise that in the short term it’s not going to become mainstream”.
BAIC produces eight alternative-energy vehicles, including electric sanitation trucks and buses. Last year the company spent Rmb700m on the technology, Mr Wang said.
State-owned BAIC, which produces trucks under the Foton brand as well as buses and military vehicles, last year launched the first passenger car built under its own brand. The company aims to launch 21 new products by 2015.
Outside China, BAIC has established factories in Brazil, India, Russia, Mexico and Thailand.
Separately a senior Chinese executive at Volvo cars, which Chinese carmaker Geely bought from Ford Motor last year, said that the carmaker aimed to capture a fifth of the country’s luxury car market within five years.
"Our vision for growth strategy in China is 200,000 vehicles… by 2015 - 20 per cent of the premium market in China”, Freeman Shen said at the conference in Detroit.
The Swedish carmaker’s growth strategy for China would be approved by its board in spring of this year, Mr Shen said.
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