Analysts are saying that fears the Chinese automobile market was slowing down, or perhaps even stagnating, have been misplaced. In fact, they say, manufacturing is up and buying is back on track.
These days, as China goes, so goes the global economy. Part of the recovery experienced by the Big 3 American automobile manufacturers was due in no small part to the strength of the Chinese market. Each month China needs to build a city the size of Philadelphia in order to accommodate the number of people moving from isolated rural areas to their thriving metro districts. With a population of more than one billion people, China is the market everyone wants a piece of. Their burgeoning middle class is growing faster than just about anyone predicted. They have consistently posted double digit growth, year after year, even during the Great Recession.
Last quarter automobile sales in China began to show signs of slowing. This caused analysts to decry the immediate backward motion of the strengthening automobile manufacturing industry. Although there was only a slight decline in the Chinese auto market, it was enough. Before the dust settled, before the final results were in, some analysts were proclaiming a second Global Great Recession.
What a difference six months can make.
Just this week a study conducted by the China Federation of Logistics and Purchasing and the National Bureau of Statistics’ Service Survey Center said that March orders in Chinese automobile manufacturing had begun to rebound, buoyed in part by a 60 percent increase in the Purchasing Managers Index. This is a sure sign that the Chinese automobile market is rebounding. This strength in the national automobile sector will translate into increased sales for imports as well, assuming of course that outside manufacturers can meet with the expectations of the growing Chinese middle class. They can do this by designing smaller, safer cars with a much higher fuel economy rating than what is expected in the West.
If they can do this they will surely reap the benefits of Chinese buying populace eager for that new car smell.