Vehicle sales growth in China – additional information
With a sales volume of approximately 22 million motor vehicles, China was the worlds’ largest market for automobiles in 2013. Vis-à-vis U.S. car market in the same year, about six million units more had been sold in the PRC. This boom in domestic market demand could be explained by China’s spectacular economic growth, which in terms is expressed by the formation of a prosperous middle class.
China had also become the world’s biggest automobile producer by 2017, with a share of some 29 percent of total global passenger vehicles produced in mainland China. The economic reforms of the early 1980s required foreign carmakers to form joint ventures with domestic auto producers in China. Over the past decades, a couple of large independent domestic auto brands have emerged. However, domestic carmakers generally lack technological know-how and market access when compared to their foreign rivals. As a result, foreign automakers enjoy larger market shares and higher profit margins in China. Overseas, Chinese autos tend to be sold to other developing countries where selling prices seem to determine consumers’ decisions. In 2012, Russia, Iran, and Iraq were among the major export destinations of Lifan, a Chinese automobile manufacturer.