China has surpassed the U.S. as the world's largest car market, and consumers there are expected to buy as many as 50 million new cars and trucks a year by 2020, the chief executive of a Chinese industrial real-estate developer told a group of automotive suppliers today.
Peter Mok, CEO of Plainvim International Ltd., delivered his bullish outlook to the U.S.-China Auto Summit today at the Ritz Carlton in Dearborn. Jones Lang LaSalle, a Chicago-based commercial real estate development firm, sponsored the conference.
China has surpassed the United States as the top market for new vehicles, largely because sales have been declining in the United States but growing rapidly in China.
Before the recession, U.S. auto sales had averaged about 16 million vehicles a year. But U.S. light vehicle sales are expected to reach 10.5 million this year and increase to about 11.8 million to 12 million next year.
Meanwhile, new car sales in China will reach about 12 million this year and 13.8 million next year, Mok said.
Over the July-September period, new car sales in China skyrocketed between 70% and 95% ahead of year-ago levels. That's largely because a $600-billion government stimulus package has put many people to work building new or refurbishing existing roads, rail lines and public transportation.
Steve Forbes, the magazine publisher and former Republican candidate for president, was equally rosy in his outlook for the Chinese market. He noted that more open access to credit will make younger Chinese more inclined to spend larger portions of their income than their traditionally frugal parents and grandparents.
The number of credit cards circulating in China has exploded from 13 million in 2005 to 175 million this year, Forbes said.
"Women now account for 50% of household income in China, up from just 20% a few years ago," Forbes said.
The publisher, who still advocates a flat tax in the U.S. and returning the dollar to the gold standard, blamed President Barack Obama for pleading with the Chinese government to raise the value of its currency, the yuan, versus the dollar. Forbes said he would prefer the U.S. boost the value of the dollar and reduce the risk of China selling off its huge holding of U.S. government securities.
