A new analysis of the automotive market in China suggests
significant growth opportunity continues in many of the country’s
provinces; however, some provinces will start to see growth rates
change significantly, according to a new detailed province-level
forecast now available from IHS Automotive, part of IHS Inc. (NYSE:
IHS), a leading source of critical information and insight to the
global automotive industry.
The forecast, the first of its kind in the industry, includes
passenger vehicle demand for 31 provinces in China and incorporates
the input assumptions from no less than nine market-leading
forecast services -- in conjunction with broad economic and
demographic intelligence from IHS -- to provide a robust solution
for vehicle manufacturers, suppliers, dealers, and marketers
seeking to understand the business opportunity in China and
strategically plan for growth. The forecast also includes vehicle
demand, segment trends, model/body style demand and brand coverage
from foreign import brands, joint venture brands and Chinese
domestic brands.
“If we think of China as 31 separate countries, 19 of the 20
fastest growing passenger vehicle markets in the world since 2002
are in China,” according to Henner Lehne, global head of light
vehicle forecasting for IHS Automotive. “Our new forecast seeks to
provide insight and guidance, inform key business decisions and
investment, and offers a level of forward-looking intelligence on
the market in China that has been unavailable up to now.”
According to IHS Automotive forecasts, passenger vehicle volumes
in the country as a whole are expected to rise more than 10 million
units by 2026.
Beijing, Shanghai Expected to Slow; Other Provinces Grow
Exponentially
Results of the analysis show that the widely held view of China
– namely that Eastern Coastal areas, approaching saturation, will
be offset by growth to the West -- is overly simplistic with more
complex local dynamics likely to play out.
For example, while Beijing and Shanghai have been thought to
have seen new passenger registrations peak (based on government
regulations and license plate restrictions), IHS Automotive
analysis shows some remaining medium-term sales growth prospects
still remain there.
The complexity of market drivers in the Chinese market right now
can be seen in recent data out of Guangdong province, one of the
largest and more mature provinces, which is seeing car sales growth
rivaling the strongest car markets in the world and growing at more
than twice the China national average -- and faster than the
majority of Central and Western provinces.
The real market opportunities for automakers come from other
parts of China as many provinces will experience a substantial
shift in affordability, personal mobility needs, and vehicle
development and production capacity improvements between now and
2026.
As an example, Shangdong, in eastern China, is currently the
ninth largest market for passenger vehicles globally, now larger
than Italy or South Korea, with additional growth expected. Also in
the east, Fujian province was the 66th largest passenger vehicle
market globally in 2002, but ranks 36th today, larger than Norway,
Peru and Israel combined. And Qinghai province, which ranked as the
116th largest market in 2002, is ranked 80th today, larger than the
automotive markets in Romania or Vietnam.
IHS Automotive also has identified some provinces that will
achieve a significant slowdown in sales by the middle of the next
decade. Shangdong, for example, was averaging double digit growth
in passenger sales for many years; however this rate is expected to
fall dramatically and average below 5 percent growth by 2026.
“A solid understanding of province-level growth dynamics is key
for future success in China,” said Lin Huaibin, manager of China
light vehicle sales forecast, based in the Shanghai office of IHS
Automotive. “The new China provincial forecast provides insight
through 2026 and addresses how population dynamics, rapid
urbanization and the differential residential density of many large
cities will affect vehicle ownership in the future.”
The forecast also outlines risks for early market saturation for
some provinces but highlights great opportunities for other
provinces for many years to come. Beijing Province, as an example,
has had tremendous increases in vehicle sales in recent years.
However, due to congestion, government policies and market
maturity, vehicle sales will likely begin to fall within a few
years at a modest, consistent pace from the levels they are at
today. While on the other hand, Qinghai, a relatively small vehicle
market today, will nearly double in size over the forecast horizon,
and will likely continue to grow into the 2030s.
IHS Automotive anticipates updates to the forecast will be
available every six months moving forward. The subscription
includes a substantial analysis of the forecast overall and for
each of 31 provinces, including historical and future forecast
through 2026, several forecast drivers and macroeconomic
indicators, as well as brand and model-level detail.
About IHS Automotive
(www.ihs.com/automotive)
IHS Automotive, part of IHS Inc. (NYSE: IHS), offers clients the
most comprehensive content and deepest expertise and insight on the
automotive industry available anywhere in the world today. With
last year’s addition of Polk, IHS Automotive now provides expertise
and predictive insight across the entire automotive value chain
from product inception—across design and production—to the sales
and marketing efforts used to maximize potential in the
marketplace. No other source provides a more complete picture of
the global automotive industry. IHS is the leading source of
information, insight and analytics in critical areas that shape
today’s business landscape. IHS has been in business since 1959 and
became a publicly traded company on the New York Stock Exchange in
2005. Headquartered in Englewood, Colorado, USA, IHS is committed
to sustainable, profitable growth and employs more than 8,000
people in 31 countries around the world.
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