China produced a record 28 million automobiles in 2016, according to official data released last month. The number of units sold hit 28 million as well, also surpassing previous highs. The growth – which experts attribute to the governments pro-consumption tax policies – is expected to continue this year.
According to the Chinese Association of Automobile Manufacturers, automobile production in the country increased 14.5 percent to 28 million units and sales increased 13.7 percent to 28 million units in 2016, compared to 2015.
Electric cars and plug-in hybrid cars saw the largest jump in production and sales in 2016. The number of new energy units produced rose 51.7 percent to 517,000 units, and sales rose 53 percent to 507,000 units. Sales of electric cars recorded the largest growth in this segment, increasing 65.1 percent to 409,000 units, followed by plug-in hybrid cars increasing 17.1 percent to 98,000 units.
Sales of passenger cars grew nearly 15 percent to 24.4 million units, accounting for almost 90 percent of total automotive sales, and commercial vehicle sales increased 5.8 percent to 3.7 million units. Sales of SUVs continued to soar, increasing 44.6 percent to 9 million units.
For the first 11 months of 2016, the passenger car market share for Chinese brands improved to 42.7 percent, compared to 41.3 percent for full-year 2015. SAIC Motor Corp. Ltd., a Chinese state-owned automotive manufacturing company headquartered in Shanghai, was the leading brand.
The remaining market share was taken up by brands from Japan, Germany, the United States and South Korea.
According to consultancy Kline & Co., since 2009, the Chinese government has implemented several policies to stimulate consumption. In 2015, including tax reduction and the subsidies in the auto-to-rural policy, the favorable tax policy on the procurement of low emission cars supported the automobile market against the gradually decreasing growth rate in China, the firm said in a report released last month.
Chinas car population was more than 150 million in 2015, an increase of over 12.5 percent compared to 2014. Since 2003, the rate of increase in the car population remained high, with an average of 11 million new vehicles each year.
The association expects growth in the automotive market to continue, with total sales of automobiles reaching almost 3 million in 2017.
In its report, Opportunities in Lubricants: China Market Analysis, Kline estimated Chinas total consumer automotive lubricants consumption at 1.4 million metric tons in 2015, valued at approximately U.S. $11 billion and forecast to grow 3.7 percent by 2020. The company says Shell was the largest supplier in China in 2015, with 14 percent of the market in terms of volume, followed by state-owned China Petroleum and Chemical Corp. (Sinopec).
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