World Energy Outlook 2007

million
Figure 9.6: New Car Sales in China
18
16
14
12
Overtake US sales
10
8
6
Overtake Japan sales
4
2
0
1995 2000 2005 2010 2015 2020 2025 2030
Sources: IEA analysis; Global Insights (2006).
Box 9.3: China’s Car Market
In 2006, the passenger-car stock in China was 17 million. From 2000 to
2006, sales grew at an average rate of 37% per year, reaching 4.4 million
in 2006. The Chinese market used to be skewed towards large cars, its
demand originating mainly from institutions and taxis. The sales profile
has been gradually changing towards smaller cars, with private car
ownership becoming the main driver of growth. In addition, in April
2006, the government reformed the consumption tax with the aim of
promoting sales of vehicles with small engines and discouraging
ownership of larger sedans.
Domestically assembled cars account for more than 96% of car sales,
imports remaining a niche luxury market. Domestic production has
expanded rapidly, displacing imports. In only a few years, the Chinese car
market has changed from being dominated by a few foreign brands,
notably Volkswagen and General Motors, to a market with more than
twenty manufacturers. They can be categorised as follows:
Sino-foreign joint ventures: Foreign companies are allowed to have a
maximum stake of 50% in a Chinese plant, so all foreign companies
operate through joint ventures. Every major foreign car manufacturer now
has a plant in China, accounting for more than 60% of car sales in 2006.
State-owned companies: These include companies like First Auto Works,
Dongfeng and Shanghai Automotive Industry Corporation, which rely
on international joint-venture partners for technology but aim to
300 World Energy Outlook 2007 - CHINA’S ENERGY PROSPECTS