Passenger car market in China provides first ray of light in 2009
Wissmann: German brands want to continue growth
"Market developments in China at the beginning of the year might be a first ray of light for the difficult year 2009," said Matthias Wissmann, President of the German Association of the Automotive Industry (VDA). He was speaking in Frankfurt before the opening of the "Auto Shanghai 2009" trade fair in the People's Republic of China. Passenger car sales in China came to 1.6 million vehicles in the first quarter of this year, which was 4 per cent above the previous year's level; in March alone sales rose by 10 per cent. Halving the sales tax on vehicles with an engine capacity of less than 1.6 liters drove up demand, as did the subsidies on car purchases for the rural population. In view of the current weak foreign business, the Government in Beijing is striving to revive domestic demand with an extensive economic recovery program, in order to achieve its ambitious growth targets.
Against the background of these efforts, passenger car sales in China this year are more or less stable, according to the VDA president. This would be a positive signal in view of the worldwide slump in demand. "In 2008 the German manufacturers sold over 1 million passenger cars in China for the first time. We believe that as the year progresses the German manufacturers can increase their figures," Wissmann said. "In the premium segment in particular, the German manufacturers took a share of 74 per cent, which meant that they improved their impressive market position even more."
All the German manufacturers are consistently pursuing their market opportunities in China and recording growth in sales. Therefore they are also using the "Auto Shanghai" to present world premieres. The VDA supports a joint pavilion at the trade fair in which 38 German supply companies are making presentations. Ten more suppliers have their own stands. The German companies are showing a representative range of their technologies and expect keen interest from the Chinese and international exhibitors and visitors, as in previous years.
China is regarded as one of the most important and largest markets for the future anywhere in the world. For this reason the country is now among the most significant foreign locations of the German supply industry. "This is not just about low assembly costs, but about exploiting market potentials and above all about quality," the VDA president stressed. The German suppliers have nearly 50,000 employees in subsidiaries, joint ventures and participations in other operations. "Especially in the current situation, China is one of the markets where a commitment pays off," Wissmann said.
The situation of the automotive industry in China and the huge growth potential make it necessary for the German manufacturers and suppliers to increase their degree of localization. The German companies receive support from the VDA's Quality Management Center (VDA-QMC); it is devoted to such things as qualifications for auditors, training and courses for suppliers. The QMC also offers assistance for entering markets and support in researching them. The office in Beijing was founded in 2005, and the branch in Shanghai was opened in mid-2006.
