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VW admits that the global car industry is a bit black at
present |
The glitz and the glamour will be on show, sleek new models will be
rolled out and the ubiquitous short-skirted leggy models will add glitter
to swanky sets of wheels.
But the smiles might be a little forced; and the salesmen less cocky.
The Shanghai International Auto Show opens tomorrow
amid a downturn in
the industry with buyers no longer snapping up cars as fast as they are
being churned out.
The figures are telling: Passenger car sales are forecast to rise 12
per cent this year, three percentage points down from last year and a big
plunge from the dizzying 75 per cent rise recorded in 2003. Average car
prices tumbled by an average of 13 per cent last year, compared with an 8
per cent drop the previous year.
The sector reported 3.5 billion yuan (US$422 million) in profits during
the first two months of the year, down nearly two-thirds from the similar
period a year earlier; and the number of units sold in the first quarter
fell nearly 8 per cent from the same period last year.
With the boom years tailing off , at least for the time being, auto makers - to use a
time-tested strategy in tough times - are "consolidating," which means
some of the weaker players may be weeded out and there could
be mergers and acquisitions on the horizon.
Car makers have had mixed fortunes in the recent past. The China
ventures of Ford, Hyundai and Honda have been on an upswing while the
long-dominant Volkswagen and General Motors units have seen a slump in
sales.
Whatever its present state, the general consensus is that China's car
market will grow steadily along with the economy; and the challenge for
auto makers is to find the right manufacturing and sales strategies.
By 2020, China is expected to overtake the United States to become the
world's biggest car market.
(China Daily) | 
Updated: 2005-04-21 09:05
