2015年CRI SUVs Sales Boom in China Auto Market

The Guanghzhou Auto 1 Show, one of China's biggest auto shows, is getting underway.

Domestic and foreign players in the auto market are taking part in the event, putting the spotlight 2 on SUVs.

Yale Zhang, Automotive Foresight 3's Managing Director, says many auto brands, such as Ford's Everest and Great Wall Motor Co's Haval H7, have shifted their focus to larger SUVs, especially since China scrapped 4 the one-child policy:

"We clearly see a lot of families want to shift from sedans to SUVs because of their safety, comfort and also bigger room. Because now you will have a family, you have a child, you know SUV obviously is better. Even if you have two kids, SUV looks better than a sedan. So this is one of the reason why SUV in China is very popular and still growing."

In the year through October, sales of SUVs surged 46 percent year-on-year in a broader market that grew 1.5 percent.

According to Automotive Foresight, a market and industry research company, 32 new SUV models are expected to be released in China for 2015.

Wu Song, General Manager of Guangzhou Automobile 5 Group (GAC Motor), says he expects Chinese brands will hit a big growth in the auto market next year, despite the country's slowest economic growth in decades:

"Next year the speed of the Chinese auto market's growth will be roughly the same as this year. I estimate it will also be a small increase. But the structure of consumption will undergo a deep change, like it has this year. From January to October the market grew six percent, but for Chinese brands the growth was higher. So I think next year the car market will grow by ten percent or less, I'd estimate at the level of five to six percent,"

Meanwhile, China's official stats show that car prices dropped 3.4 percent in the first nine months of this year, outpacing the 1.2 percent decline for passenger vehicles overall.

HIS Automotive, an interests group for car manufacturers, predicts car sales growth is expected to slip to 11 percent next year.

Analysts 6 at Fitch Ratings, an international ratings agency, warns that new SUVs will have a tougher time commanding fat profit margins 7 they may have enjoyed in recent years.

Automotive Foresight's Yale Zhang, however, disagrees, saying there is still room for growth in the Chinese market, especially in big cities:

"The market actually slow down a little bit this year because of the economy and also the stock market crisis. But overall the market has not really been saturated 8. It probably is in some larger cities, but in the majority of China cities there are plenty of room for the automobiles 9 to grow further,"

Carmakers like Volkswagen have expressed eagerness to expand investment in the Chinese market, with six new locally made models to be launched in the next three to four years.

For CRI, this is Ryan Price.