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Dongyang: China’s auto market still lags behind U.S.

China’s auto market is no match for the U.S. despite its better performance in January sales of new vehicles,” reported Xinhua News Agency quoting Dong Yang, secretary general of China Association of Automobile Manufacturers (CAAM).

Dong made such a statement against media reports that China has overtaken the U.S. since China’s auto sales in January surpassed the U.S. for the first time in history. Mike DiGiovanni, executive director of global market and industry analysis, General Motors, predicted in a conference that China may sell about 790,000 vehicles in January, well surpassing the U.S.’s 656,900 vehicles in auto sales. According to U.S. media reports, the January auto sales in the U.S. shrank dramatically by 37.1 percent to hit the lowest monthly level in 27 years.

The latest statistics released by CAAM show that China sold 735,500 vehicles in January, down 14.35 percent year-on-year, but still 78,600 units more than the sales in the U.S. during the same period of time.

Many media think it is a “significant” event for Chinese auto industry. However, it is too soon to conclude that China will be the largest auto market only based on a single monthly sales volume.

“Despite China’s better sales performance, the situation is still grim,” commented auto analyst Jones Zhong.

“A monthly sales champion can represent nothing,” Zhang Zhiyong, senior auto consultant, told CBU/CAR. “It’s ridiculous to say that China will overtake the U.S. only by sales in a single month.”

Dong Yang echoed Zhang’s comments. “The situation is only temporary, and China is far from matching the U.S. in terms of R&D, corporate management, market scale and market services,” said Dong.

Huang Yong, chief expert of China Automotive Technology and Research Center (CATARC), predicted that new car sales would return to 16 million units when the U.S. economy recovers from the financial tsunami.

China sold 7.22 million new vehicles in 2006, overtaking Japan as the second largest auto market after the U.S., but in that same year, the U.S. sold more than 16 million units.

Huang also said sales revenues were stronger in the U.S. because average price of new vehicles there was higher than that of China.

As revealed by some statistical reports, there are roughly 60 million vehicles in China, with five out of every 100 people owning a car. While the vehicle population in the U.S. stands at 235 million units, with 79 percent of the population owning an automobile.

 

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