Shock news: Automakers make good money in China

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From Trading Markets:

Amid the financial crisis, automobile multinationals encountered setbacks in Europe and US with no exception. No one expected that the burgeoning Chinese region had become their most lucrative market.

Volkswagen discloses that it sold 1.4 million vehicles in China in 2009, leaping 36.7% from a year earlier. The sales of Volkswagen-branded cars rose 32.4% to 1.12 million vehicles, that of luxury brand Audi hiked 32.9% to nearly 160,000 vehicles, and that of Skoda jumped from 59,284 vehicles to 122,556 vehicles.

On January 7, 2010, Ford Motor Company (NYSE: F) announced that it sold 440,600 vehicles in the Chinese market last year, leaping 44%. The sales of its joint venture Chang’an Ford Mazda Automobile Co., Ltd. (CFMA) jumped more than 50% to 316,000 vehicles.

Meanwhile, Ford’s archrival General Motors Corporation (NYSE: GM), which was in hot water in its US headquarters, sold 1.8264 million vehicles in China, surging 66.9%.

A day earlier, Toyota Motor Corporation (NYSE: TM) revealed that its sales rose 21% to 709,000 vehicles in the Chinese market in the period. Guangqi Honda Automobile Co., Ltd. sold 365,600 vehicles.

Hyundai Motor Company and Kia Motors Corporation witnessed sales of 800,000 vehicles in China in the year. The sales of Beijing Hyundai Motor Company swelled 93.6% to 570,000 vehicles, 14.1% higher than its target of 500,000 vehicles.

Hyundai Automotive Group released on January 4 that it planned to boost its sales by 17% to 5.4 million vehicles in 2010, through the promotion of electric cars, fuel cell vehicles, and hybrid cars.

The reason for the prosperity of the Chinese auto market, citing auto.sohu.com analyst Jia Xinguang, is that China had a stable economy and the local government promulgated favorable policies such as the reduction of taxes on buying small-displacement passenger cars, rural promotion of vehicles, and auto replacement.

The favorable policies have gotten effect instantly. Reporters find out that in their hometowns, families that are capable of affording cars all have purchased or are preparing to buy vehicles.

Although the taxes on buying vehicles were upgraded in early 2010, the sales boom in China will not be greatly affected in the year, pointed out experts.

Winfried Vahland, president and CEO of Volkswagen Group China (VGC), says he is very confident in the Chinese market, which he believes will rise 10% to 15% this year. Guangqi Honda’s production and sales plan for the year is 386,000 vehicles. More optimistic prediction is that China’s auto sales will top 15 million vehicles in the period.