Guess who’s now the second-biggest market for new cars in the world?
Reuters reported Friday that new car sales in China were up 15% in 2004, up 21.4% from those values in 2005, and now up 36.5% for the first six months of 2006 compared with the first six months of 2005.
How long can that continue? China’s first-half vehicle sales were 3.5 million units or 7 million per year. With a population of 1.3 billion, that amounts to 5.4 vehicles sold per thousand people per year. For comparison, last year fewer than 300 million Americans bought 17 million vehicles, or 57 vehicles per thousand people per year. So, that China statistic isn’t likely to increase any more than another 1,000 percent or so.
Accounts in places such as the Washington Post and the Wall Street Journal reported that Chinese car sales were up an even more astounding 46.9% in the first half of 2006 compared with the first half of 2005, rather than the 36.5% figure I’ve quoted here. However, People’s Daily Online refers to 46.9% as the growth rate for “sedans”, which apparently is a category the Chinese use to refer to about 40% of passenger vehicles, as distinct from other categories such as “subcompact”, “full-size”, “SUV”, “micro car”, and “luxury”. But 36.5% is still a whopping big number.
Notwithstanding, even in China, energy prices can have an effect. Reuters went on to note that, for the month of June alone, 2006 car sales in China were only up 5.8% compared with June 2005, and SUV sales were down 15.2%.
But tell me once again how oil is ever going to return to $30 a barrel?