SEMA eNews Vol. 14, No. 12, March 24, 2011

This Just Out: New Estimate of the Total Number of Passenger Vehicles in China

 

  china
  The SEMA China International Auto Parts Expo (CIAPE) China Business Development Conference will provide the opportunity for SEMA members to meet one-on-one with top Chinese distributors.

It’s hard to miss news about the fast growth of China’s passenger-vehicle market. Sales rose by 37% in 2010 to 11.9 million units, according to J.D. Power and Associates. In the United States, sales of light vehicles rose by 11% to 11.6 million units.

But, China’s passenger-vehicle market—including cars, SUVs and MPVs—didn’t take off until around 2001, so the number of passenger vehicles in operation is much smaller than in the United States. And unlike the United States, where SUVs and pickups represent more than half of the vehicles sold, the passenger vehicles in operation in China are overwhelmingly cars, mainly sedans.

But SUVs are the fastest-growing segment in China, and SUV and car owners want to customize their vehicles, too. So even though the mix of products Chinese consumers seek might differ from the United States, China still has the potential to be a hot market for SEMA members.

The precise number of vehicles in operation in China is hard to calculate because the government segmentation is quite different from J.D. Power’s, Jenny Gu, a senior analyst with J.D. Power and Associates in Shanghai told SEMA. But, J.D. Power estimates there are some 46 million passenger vehicles currently in operation in China, said Gu.

At the end of 2010, about 88% of vehicles in operation were cars, 9% SUV, and 4% MPVs, said Gu. Worth noting is the growing popularity of SUVs. In 2007, SUVs accounted for only about 5% of the total, she said. A demand for second or replacement vehicles in China’s coastal cities is driving SUV and MPV demand, said Gu.

Pickups are not very popular in China. Sales were only about 300,000 units in 2010, said Klaus Paur, managing director of automotive research in Greater China and Korea for Synovate Motoresearch. A number of factors are currently hindering the growth of this segment, including local laws that ban pickups from being driven on main highways.

The U.S. market is huge by comparison, but there is not as much growth opportunity. At the end of 2010, nearly 240 million passenger cars and light trucks were registered on the road in the United States, according to Experian Automotive. Light trucks accounted for 50.4% of that number, up from 50.1% at the same time in 2009. Light trucks include pickups, SUVs, CUVs and vans.

Unlike China, where the number of cars on the road is showing a steady rise, in the United States, the number fluctuates. According to Experian, the number of registered cars and light trucks at the end of 2010 was up on-year but down compared to the previous quarter.

One thing driving China’s car sales is that only about 35 people per 1,000 own a car. Despite a widely expected slowdown in car sales in China this year as government incentive programs end, most forecast the market growth rate to be 10% or higher.

In the United States, there are about 439 cars per 1,000 people. Sales in the United States are forecast to rise by about 12% in 2011 compared to last year, according to J.D. Power.

In the United States, SEMA estimates $1,500 is spent per vehicle on customization. The customization market is worth $28 billion annually.

In China, a number of factors should aid the growth of the market, including a loosening of laws regarding customization, growing disposable income and the rising number of vehicles on the road.

Market studies—which gauge the size of the market, such as those conducted by SEMA—for the United States simply don’t exist at the same level of detail in China. But in estimating the per-vehicle amount at only 10% of the size of the U.S. customization market, even at this early stage, it is worth about $6 billion. And that will only grow.

Explore the market by taking advantage of a SEMA-member-only conference taking place in Beijing, China, September 7–10, 2011.

This cost-effective, turn-key program includes:

  • Opportunities to meet one-on-one with top Chinese distributors (retailers and wholesalers)
  • Networking opportunities
  • VIP access to a leading automotive aftermarket trade show in China
  • Hotels and meals
  • Promotion of your brands to top distributors and media (starting immediately)

For more information, visit www.sema.org/china or contact Linda Spencer at lindas@sema.org.