It is not all bad news for the automotive sector in China despite the slowdown in the national economy and restriction of car sales in key cities.
Vehicle sellers just need to be in the right places at the right time to benefit from other indicators that are on the positive side. First indicator is per capita income which is up, particularly in rural areas where it grew 7.5 percent to 11,442 yuan ($1,700). In the urban areas, the growth was slower at 6.6 percent to 31,195 yuan.
Data from the China Association of Automobile Manufacturers, released on Jan. 12, said 21.1 million cars were sold in 2015, up 7.3 percent compared to 2014. In comparison, the last two years logged 10 percent and 16 percent increases, reported The Wall Street Journal.
Although sales of vehicles in coastal cities had gone down due to restrictions to ease the smog levels, China has a vast land mass made up of rural areas where double-digit growth of car sales was maintained. That’s because for many Chinese, owning a car remains an aspiration and comparing overall sales figure the past 10 years, sales is still low.
After all, car ownership is China, with its 1.37 billion population, is low at 124 vehicles per thousand people. It is significantly lower than data in other developing economies, pointed out Automotive News.
Because of the 20 percent contraction of the Shanghai stock market and the 1.4 devaluation of the yuan, the National Bureau of Statistics said the country’s gross domestic product (GDP) expanded by 6.9 percent in 2015, the slowest pace of growth since 1990.
As a result of these developments, experts forecast further slowdown in GDP growth to 6.5 percent in the coming years. It is slow by Chinese standards, but rural auto sellers could likely outpace that growth rate by focusing on countryside Chinese who would want to be upgraded from commuters to motorists.