Shanghai, May 11 (Gasgoo.com) Guangzhou Automobile Group Co (GAC) has seen the market opportunity in the growing rural demand for minibuses and acquired a small minibus maker in Zhejiang province to expand its market share in this sector, China Daily reported.
Minibuses are popular in rural China for their affordability and versatility, said a Shanghai-based market analyst. Last year, 1.9 million minibuses were sold in China, 18% of the country's total passenger vehicle sales, and the figure will grow by 20% to about 2.3 million this year.
The growth, however, is likely to slow down in the next few years since demand for minibuses has been growing in advance between 2009 and 2010, and the minibus will be finally phased out of the market due to its lower technology and poor safety, the JD Power Consulting (Shanghai) analyst said.
Under this possible scenario, Guangzhou Auto is expected to get more valuable gain from its acquisition of minibus manufacturer Zhejiang Gonow Auto Co, by using the added production capacity later to produce sedans or economical cars in addition to minibuses.
Guangzhou Auto, China's sixth-largest automaker and Chinese partner of Toyota, Honda and Fiat, aims to boost its vehicle sales to 2 million units annually in its mid-term plan, from 610,000 sold in 2009, a goal to be achieved faster by acquisition and expansion.
