China Overtakes The US As World’s Largest New Vehicle Market

Numerically, right now, in which country were more new cars sold than any other? Until recently, the answer was a monty - the US - but not any more.

In what must be sending tingles of trepidation up the spines of our American cousins, and confirmation of a new world order on the horizon, there were more new vehicles sold in China during January than in the US. (And you were thinking perhaps the Chinese economy was stagnating?)

I'll now give you a moment to re-read that and wrap your head around the information.

The Chinese purchased 760,000 new vehicles in January, enough to push China’s annual sales to 10.7 million units, eclipsing the current US annual volume of 10 million. Compare that to 2007, when 16 million new cars were sold in the US and you get a feel for the extent of the sales downturn there.

While new car sales in January in Australia plummeted by 18.5 percent (compared to January ’07), new car sales in North America for January fell to their lowest level in decades. Chrysler's sales dropped by 55 percent, GM's by 48 percent and Ford’s by nearly 40 percent. Even Toyota copped a pasting with sales falling 34 percent.

With greater car sales than ever before, the above sight is becoming a common one on Chinese roads.

Despite the scale of their problems, US manufacturers are still presenting brave faces. Chrysler’s vice-chairman Jim Press points out that ‘part’ of the reason for the huge decline in Chrysler sales is its decision to stop selling to fleet customers. Fleet sales have traditionally been low-profit or no-profit deals and amounted to just 2,000 units in January, an 80 percent drop.

Press is of the opinion that carmakers have no choice but to adjust their output to fit the current annual sales rate of around 10 million units.

GM's director of global analysis, Mike DiGiovanni, believes that a turnaround hinges on improving access to credit for consumers and improvement in the housing market (all of which has the ring of 'the bleedin' obvious' about it).

Meanwhile, Ford economist Emily Kolinski-Morris acknowledges that the bottom of a market is impossible to predict, but believes there are signs of improvement.

She cites small glimmers of hope such as a two-point increase in a recent consumer-confidence index as well as the stabilisation of retail vehicle sales over the past four months. The last four months has seen vehicle sales stabilise at the very low level of 8.3 million units.

In the meantime and for the foreseeable future at least, it would appear that a 'global shift' in economic power is underway. What that might mean is uncertain, but, numerically at least, China is now the world’s largest new car market.

[Source: Time.com]