Kia storms the burgeoning Chinese auto market
Monday, December 14, 2009 at 01:18PM Auto sales in China for November, 2009, were a staggering 93% higher than for the same month last year. This accounted for one-quarter of all car sales globally in that period, making China the world's largest auto market at this time. General Motors sold more cars in China in November than it did in the US.
In spite of the rapid increase in sales, the total number of cars owned privately by Chinese citizens remains relatively small at just under 20 million. This is in a population of 1.4 billion. By comparison, there are approximately 250 million privately owned cars in the United States, in a population of 308 million.
Part of this phenomenal growth is the result of government policy. The Chinese government targeted its auto sector in response to the global economic slowdown of 2008, stimulating car sales by eliminating a 10% sales tax on new vehicles, reducing or eliminating toll fees and road maintenance feels, and reducing interest rates on car loans. Auto sales reached 1 million per month from January 2009, and the forecast is for upwards of 13 million sales by year end. With the huge increase in numbers of vehicles, oil demand has soared as well. China's oil consumption grew by 12% in 2008 over 2007 levels, when it was estimated at just under 7 million barrels per day. The US currently consumes 21 billion barrels per day.
One non-Chinese automaker benefiting from the explosive growth in China is Kia. Its sales worldwide increased by 53% in November, with China accounting for roughly 30 thousand out of a total 152,826 sales. Year-over-year, Kia's Chinese sales were up 190%. Sales were up 43% in Europe, 41% in Korea and 20% in North America. For the year, Kia's worldwide sales are up 17%, with 1, 489,204 units sold.
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