After taking off with a blisteringly fast pace in 2010, selling 33 percent more vehicles than the year prior, China cooled down to a projected three percent increase for 2011.
But according to a new report by Automotive News China, citing predictions from IHS Automotive and LMC, new car sales could improve by as much as eight to 10 percent for 2012 in the Chinese market.
That prediction takes into account the struggles currently facing China’s economy, including allegations of a state-propped real estate bubble on par with what recently wreaked havoc on the U.S. financial system.
So why the projected growth in 2012?
The prediction stems partially from the fact that in 2010 China’s per capita income of $4,200 was actually higher than the global average, but per capita vehicle purchases remained at rates lower than international averages. In other words, it is believed that there is significant enough pent up demand from hesitant buyers that even if the Chinese economy is only projected to grow eight percent as a whole in 2012, the automotive industry will likely match or surpass that growth.
But before you rush out and buy stock in automakers leaning on the Chinese market, do keep in mind that government measures aimed at reducing air pollution could potentially play spoiler and artificially keep new car sales down.
References
1.’Despite slowing economy…’ view
