China's automobile market has cooled down this year, but automakers remain confident about the long-term outlook for its market.
Senior executives from major automakers attending the ongoing Guangzhou Auto Show have expressed their confidence, forecasting an overall growth of 5 to 10 percent for 2012 as against this year's relatively slow 3 percent.
Kar-Thomas Neumann, president and CEO of Volkswagen Group China, said Volkswagen sales in China are expected to rise 15 percent year-on-year, for the first time, by the end of 2011.
In the first 10 months of the year, Volkswagen Group China and its two Chinese joint ventures -- Shanghai Volkswagen and FAW-Volkswagen -- sold almost 1.9 million cars on the Chinese mainland and in Hong Kong, a 14.8-percent increase.
"We're clearly on track to make 2011 the most successful year in company history," said Neumann.
He said the great potential demand for cars in the second and third-tier cities would further bolster the growth of the auto market in China, where there are currently only about seven cars per hundred persons.
Yao Yiming, executive vice president of Guangqi Honda Automobile Co. Ltd., a joint venture between the Guangzhou Automobile Group and Honda Motor, said China's auto industry needs a cooling-down period after developing too fast in the past two years as both production and sales doubled.
Yao said 2011 is a year for adjustment and the auto market would experience growth of 5 to 10 percent the next year.
China has been the world's largest auto market since 2009, when full-year sales soared 46 percent to 13 million units thanks to favorable policies from the government including tax rebates for small cars. The momentum continued in 2010 as sales jumped more than 32 percent to 18 million vehicles.
But as government stimulus programs expired, growth slowed sharply in 2011 to 3 percent. Vehicle sales totaled 15 million units in the first 10 months, according to China Association of Automobile Manufacturers.
Statistics from the association showed that the overall market numbers have been affected by sluggish commercial vehicle sales that declined 5 percent in the first 10 months. Passenger vehicle sales still increased by 6 percent, though the growth is far less striking than in previous years.
Liu Jinliang, vice president of a private Chinese automaker Geely Motor, said his company would witness a steady growth in car sales in 2012, when new Geely models are expected to roll off assembly lines on mass.
Liu estimated an increase in sales of over 5 percent next year.
While automakers remain confident about the long-term outlook for China, as evidenced by a slew of expansion projects announced in recent years, near-term prospects are not promising amid global economic uncertainties.