Volkswagen AG, which has the biggest market share among foreign carmakers in China, said passenger car sales growth will slow to between 18 percent and 20 percent as the government attempts to cool economic growth.
``The car market is calming down," said Bernd Leissner, Volkswagen's Asia-Pacific president, at the Beijing Auto Show.
PHOTO: REUTERS
Last year, Volkswagen, General Motors Corp and other makers saw a 76 percent increase in passenger car sales in China as economic expansion of 9.1 percent boosted urban incomes, making private vehicles affordable to more people. The government said last month it wants to slow growth to about 7 percent this year to prevent over-investment from causing inflation.
Volkswagen sold 697,000 of its Santanas, Boras and Audi luxury models in China last year, giving it market share of 32 percent, compared with 60 percent in the past five years. The Wolfsburg, Germany-based company said on Tuesday it would introduce new models and expand production to keep its share at about 30 percent.
Earlier this month, the Chinese government unveiled a new auto policy aimed at encouraging carmakers to merge into fewer, bigger companies and protecting China FAW Group Corp and other large producers.
Phil Murtaugh, chairman and CEO of General Motors China, said he expects the Chinese market's sales to rise this year between 16 percent and 20 percent.
Other automakers in China are more optimistic about the world's fastest-growing auto market, even after the economic measures have curbed sales in the past few weeks.
"There are limits, even for the Chinese market," said Roman Fischer, chairman and chief executive of DaimlerChrysler AG's Chinese unit at Beijing's auto show, the industry's biggest exhibition in China. "I still think we'll get 40 percent to 50 percent growth this year, but not 60 percent."
Stuttgart, Germany-based DaimlerChrysler, the world's fifth-biggest automaker, makes sport-utility vehicles and sedans and will start producing Mercedes-Benz models in China later this year.
Sales of passenger cars in China, the world's third-biggest automotive market behind the US and Japan, may rise to as many as 16 million units or 18 million units a year by 2020, about the same size as the US market now, Leissner said yesterday.
DaimlerChrysler, which pared investments in South Korea and Japan, is betting on a luxury Mercedes van and a Chrysler sedan to sell 75 percent more vehicles in China, the world's third-largest automotive market.
The company plans to import the Chrysler 300 sedan and Crossfire sports car this year and make the Mercedes Viano van in southeastern China's Fujian province starting in 2005, said Roman Fischer, chief executive of DaimlerChrysler China Ltd.
DaimlerChrysler is investing US$1.2 billion to make as many as 25,000 Mercedes-Benz E-Class and C-Class sedans with Beijing Automotive Industry Holding Co. It will relocate a Beijing factory that assembles Jeep sport-utility vehicles and add 40,000 Mercedes vans a year in Fujian with Taiwan's China Motor Corp (
The automaker sold about 9,200 Mercedes-Benz models and 20,000 Jeeps last year, spokesman Trevor Hale said. Production at the Beijing Jeep plant is expected to double to 40,000 units this year, the automaker said.
"Mercedes alone will grow to 13,000 units to 14,000 units by the end of this year," said Joachim Smith, executive vice president in charge of selling Mercedes cars, in Beijing. "In five to 10 years, we will be at 50,000 cars."
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