China overtakes US as largest auto market: state media

[RandomGuy]

SHANGHAI (AFP) – China overtook the United States as the largest auto market in the world in January, according to data published by Chinese state media on Tuesday.

Analysts said the United States was likely to quickly regain the top spot, but the figures showed China was on track to become the undisputed number one car market much sooner than expected as its population grows wealthier.

A total of 735,500 automobiles were sold in China last month, the official Xinhua news agency reported, citing the China Association of Automobile Manufacturers.

By contrast, 656,976 vehicles were sold in the United States, according to preliminary estimates issued last week by market research firm Autodata.

"China had a strong month and the US probably had its worst month in a long time," Michael Dunne, a Shanghai-based analyst with research firm JD Power said.

Exploding car ownership is one of the most visible manifestations of China's frantic economic development in recent years.

It has been fuelled by the growth of an urban middle class, which may number 100 million or even more, depending on the exact definition.

Despite the strength of China's January sales, they were still down 14.35 percent from a year earlier, Xinhua reported. Sales were down 0.83 percent from December when 741,600 vehicles were sold.

Analysts said January was an unusual month because the Lunar New Year boosts sales in China as the United States sees a post-Christmas drop, and the United States was expected to remain the world's largest market for the full year.

"We're still holding to our forecast that China won't surpass the US this year," Dunne told AFP.

The China Passenger Car Association industry group also remained cautious on the outlook for the rest of the year, saying rebates on fuel efficient cars would help sales in the first quarter but the incentive was unlikely to have a lasting effect.

"The situation in the passenger car market is quite good now but there is no guarantee it will continue through the whole year," the association said in a report last week. "It is too early to be overly optimistic."

The January sales figures show a collapse of US car sales rather than a surge in Chinese demand, said John Zeng, a Shanghai-based analyst with Global Insight.

"More than 80 to 90 percent of US car purchases were made on credit," Zeng said. "Once the financial system got into trouble, the sales model supported by the financial system collapsed."

Growth in China's car sales, which are mostly cash-based, is expected to slow to three to four percent this year due to worsening economic conditions, according to Global Insight.

That's less than half the eight-percent rise in 2008 when 9.4 million units were sold.

As recently as the end of last year, experts' consensus was China would overtake the United States as the world's largest auto market by 2015, but Dunne said the financial crisis' fallout meant it could happen as early as next year.

"I think 2010 is reasonable now," he said. "But things are moving so quickly and people in the current environment are more taken with 'How do I survive?'"

http://news.yahoo.com/s/afp/20090210/bs_afp/chinausauto

[RandomGuy]

I would note that car sales in China tend to be to first-time buyers, rather than sales of vehicles that are replacements of older cars.

That means that China is adding new cars at a rather astonishing rate, and everyone of those new, added vehicles is competing against you for each gallon of oil pumped out of the ground.

We will be lulled into almost forgetting $4.00/gallon of gasoline with about 3-5 years of relatively cheap oil due to the economic downturn and destruction of demand.

At some point after that, and after the global economy picks back up, the slack in supply will be taken up with a rather large snap and probably pretty quickly, and we will see $4 and higher. I give it about 6-9 years or so for that to happen.

[Twisted_Dawg]

I would note that car sales in China tend to be to first-time buyers, rather than sales of vehicles that are replacements of older cars.

That means that China is adding new cars at a rather astonishing rate, and everyone of those new, added vehicles is competing against you for each gallon of oil pumped out of the ground.

We will be lulled into almost forgetting $4.00/gallon of gasoline with about 3-5 years of relatively cheap oil due to the economic downturn and destruction of demand.

At some point after that, and after the global economy picks back up, the slack in supply will be taken up with a rather large snap and probably pretty quickly, and we will see $4 and higher. I give it about 6-9 years or so for that to happen.

Only the dumb people of this country will be lulled back into cheaper gas and go back to buying gas guzzlers. With all those new drivers in China and India, the demand for oil will increase dramatically. I do not think it will take
6-9 years though. Oil is already beginning to creep back up. The futures for oil May 09 delivery is nearly $50 per barrel.

[CubanMustGo]

Only the dumb people of this country will be lulled back into cheaper gas and go back to buying gas guzzlers. With all those new drivers in China and India, the demand for oil will increase dramatically. I do not think it will take
6-9 years though. Oil is already beginning to creep back up. The futures for oil May 09 delivery is nearly $50 per barrel.

Based on the new vehicles I see on the road in Austin, there are a lot of dumb s

[RandomGuy]

Only the dumb people of this country will be lulled back into cheaper gas and go back to buying gas guzzlers. With all those new drivers in China and India, the demand for oil will increase dramatically. I do not think it will take
6-9 years though. Oil is already beginning to creep back up. The futures for oil May 09 delivery is nearly $50 per barrel.

Crude oil inventories are at record highs from what I understand.

It is probably due to go up a little, but the economic slowdown will put a serious dent in demand.

My guess is that demand will stay flat or moderately lower simply due to the global economic slowdown, which will probably last for approximately 2-3 years (this is the general consensus).

After that, demand will pick up moderately for another 2-3 years, and resume a good clip after that.

My gut feeling is that we will see $4 gas in about 4 to 5 years, but i was simply being somewhat conservative in my analysis.

My gut feeling is also that we will see $10 gas in about 12-15 years, based primarily on crude oil demand, but that is my gut feeling, and not based on anything solid.

As for people who buy gas guzzlers now: those gas guzzlers will probably be among the last ever made, barring something truly revolutionary in man-made fuel technology springing up.

[RandomGuy]

Based on the new vehicles I see on the road in Austin, there are a lot of dumb s

The deals you can get on those gas guzzlers at the moment, and probably for a few months to come, are good enough to overcome most future gas prices.

As it is, I would say to go for it. By the time gas gets REALLY expensive again, it will be about the time to replace the vehicle anyways by my estimation.

Deals on vehicles now are literally a once in a lifetime opportunity.

[The Reckoning]

SHANGHAI (AFP) – China overtook the United States as the largest auto market in the world in January, according to data published by Chinese state media on Tuesday.

i didnt bother to read any more after that

[z0sa]

i didnt bother to read any more after that

Yep. I honestly don't think its very much use to take official Chinese media seriously - those guys/ladies are given houses and cars to make China look good to the world. And whose going to double check them?