China will be driving force for global auto market, says expert

China is expected to once again be the driving force for the world automotive market, with its auto sales accelerating further despite a global decline this year, an industry expert has said.

Global car sales are expected to fall by 3.2 percent in 2022, while those in the Chinese market will increase by 5 percent year on year, according to Ferdinand Dudenhöffer, director of the CAR Center Automotive Research in Duisburg, Germany.

However, in the first half of the year, German auto makers saw declines in both sales and their market shares in China.

Volkswagen, for instance, recorded a slump of 20 percent in China sales compared to the same period last year, while sales of Mercedes-Benz and BMW both fell 19 percent.

The market shares in China of these three leading German auto makers, meanwhile, all shrank in the first six months, with Volkswagen down from 18.4 percent to 14.2 percent, Mercedes-Benz from 4.4 percent to 3.4 percent, and BMW from 4.7 percent to 3.7 percent, German business newspaper Handelsblatt reported.

While the United States auto market experienced an 18 percent decline in sales in the first half of 2022 and the European market suffered a 14 percent drop year on year, China saw its new car sales up 4 percent in the first six months. This is a clear indication that China will once again be the driver of the world auto market, Dudenhöffer claimed.

With the surge in auto sales this year, China is propping up the world auto market from the depression, and it will grab a bigger share of the world market, at 32.1 percent, he predicted.

The winners are clearly Chinese manufacturers and Tesla. And German auto makers will have a tougher time in China, Dudenhöffer said, citing the industry's transition into electrification as one of the key reasons.

Volkswagen Group CEO Herbert Diess once said during his tenure that the company was facing struggles with electrification.

Dudenhöffer took a dim view of some German media claims of "over-dependence on Chinese market" and "decoupling from the Chinese market," saying that giving up on the Chinese market would be an irreversible loss for the industry.

Auto sales in China failed to perform well enough in the first half due to the lack of chips amid a resurgence of the COVID-19 pandemic, but the market has been recovering since July.

Data from the China Association of Automobile Manufactures showed that car sales in China reached 2.42 million vehicles in July, up 29.7 percent year on year. Among them, 593,000 new energy vehicles were sold, rocketing 120 percent from a year earlier, with a market share of 24.5 percent.

The association expects China's auto market to extend steady growth in August, with passenger car production and sales both increasing rapidly, and NEVs and auto exports also maintaining good performance.