China's auto sales rise 15.7 percent in 2013

BEIJING (AP) - China's auto sales rose 15.7 percent last year to 17.9 million vehicles, boosted by strong demand in December, an industry group reported Thursday.

Sales growth in China, the biggest auto market by number of vehicles sold, has slowed but still outstrips Western markets. Automakers including General Motors and Toyota reported record China sales in 2013 and BMW said this country became its biggest market.

December was China's busiest sales month yet at 2.1 million vehicles, the China Association of Automobile Manufacturers said. It gave no growth rate, but that total would be a 17 percent increase over the figure reported earlier for December 2012.

Competition is intensifying as automakers plow billions of dollars into developing models to suit Chinese tastes. Some have launched low-cost brands created for this country.

Sales growth is likely to decline to 8 to 10 percent this year, said Jia Xinguang, an independent auto analyst in Beijing. He said the outlook will depend on whether the government tightens curbs meant to limit growth in vehicle ownership to fight traffic and smog.

Chinese leaders see auto manufacturing as a driver of economic development and a source of higher-paid jobs. But rapid growth has left Beijing, Shanghai and other major cities choking on smog. Some city governments have responded by limiting the number of new vehicle registrations they allow.

Last year's total vehicle sales, including trucks and buses, rose 13.9 percent to 22 million units, according to the CAAM.

China's auto market is the world most crowded, with major global automakers and dozens of small Chinese brands jostling for sales.

The intense competition is squeezing indigenous Chinese automakers that have less advanced technology, especially as sales growth slows.

Sales by Chinese brands rose 11.4 percent in 2013, well below the overall rate, to 7.2 million vehicles. CAAM said their total market share slipped by 1.6 percentage points to 40.3 percent.

Better-established domestic brands such as Chery Inc., Geely Holding Group and Great Wall Motors Co. are likely to gain market share at the expense of smaller rivals, said Jia.

"The better ones will get better and the worse ones will get worse," he said.

Also in 2013, Japanese automakers rebounded from a slump triggered by diplomatic tensions between Beijing and Tokyo over a territorial dispute. Their sales rose 16.4 percent, ahead of the market.

Sales of German brands rose 18.8 percent and those for American automakers by 12.4 percent, according to CAAM.

Earlier, General Motors Co. said sales of GM-brand vehicles by the company and its Chinese partners rose 11.8 percent in December over a year earlier to a monthly record of 271,002. GM said that raised total 2013 sales by 11.4 percent to 3.1 million vehicles.

Ford Motor Co. said December sales rose 35 percent to 94,838 vehicles. That raised its 2013 total by 49 percent to 935,813.

Toyota's December sales soared 119.4 percent to 108,400 vehicles, raising its annual total by 109.2 percent to 917,500. Nissan Motor Co. reported December sales rose 70.4 percent to a record 134,200 vehicles. That boosted 2013 sales by 17.2 percent to 1.3 million.

BMW Group said 2013 sales of its BMW and Mini brand cars rose 19.7 percent to 390,713.

Newcomers still are piling into China's glutted market.

France's Renault SA, looking to China to help offset sagging European demand, signed an agreement in December to open its first Chinese factory with a local partner. The company says it will have a production capacity of 150,000 vehicles a year.

"China's market is an opportunity, but not an opportunity for everyone," said Jia. "It will be pretty hard for Renault to join the competition so late."

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AP researcher Fu Ting in Shanghai contributed.

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China Association of Automobile Manufacturers: http://www.caam.org.cn


(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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