China Auto Sector:Access China conference highlights
Mr. Waili Li, Director of Information and Industrial Development Unit, StateInformation Center, presented at our Access China conference on 10January.Key highlights:
- In 2017, the growth rate of commercial vehicles (CV) was higher than that ofpassenger vehicles (PV) for the first time. Within the CV sector, truck growth(especially for heavy-duty) was higher than that of bus. This is driven by thecrackdown on truck overloading being extended to provincial highways, but theimpact might not be sustainable.- Meanwhile, weak PV sales growth is an aftermath of demand being pulledforward by tax stimulus. On the positive side, OEMs' supply discipline supportstransaction prices.
- The State Information Center still believes in the long-term growth potential ofChina's auto sector based on still-low ownership. Meanwhile, it expects China'sPV wholesale to grow by c.3% in 2018.
- Mr. Li thinks that, in the long run, the new energy vehicle (NEV) market will notonly be driven by government polices but also by market demand. Currently, NEVsales in China are largely concentrated in cities with auto purchase restrictions,while the percentage of non-private purchases (52%) is higher than that of private(48%). However, with the functionality and quality improvements for mid-to-highendNEVs, amid increasing foreign OEM participation, private demand shouldboom.
- As artificial intelligence (AI) is a national strategy, intelligent connected vehicles(ICV) should grow fast in China, and the demand will probably be driven by theyoung generation. With more software being used in ICVs, software companieswill be increasingly involved in the auto sector.