In 2007, China's automotive industry took a significant leap forward, marking another milestone in its rapid development. The market continued to expand, with production and sales volumes reaching new heights. By the end of 2007, there was a lot of discussion about how to evaluate the performance of the auto market that year. Factors such as the emergence of new energy vehicles, reduced overcapacity, uncertain South-South restructuring, technical barriers for domestic brands, and the introduction of new models all played a role. Meanwhile, price cuts across the sector also influenced consumer behavior.
Despite these challenges, industry professionals remained optimistic. Looking back at the past two years, they believed that from 2006 to 2010, during the "Eleventh Five-Year Plan" period, the growth in production and sales would remain the core of the industry’s development. Experts from the China Association of Automotive Engineers, including Zhang Xiaoyu, predicted that after exceeding 7 million units in 2006, the total would reach 8.5 million in 2007 and potentially hit 9 million by the end of the year. The target of 10 million units, while ambitious, could be achieved earlier than 2010.
According to data from the China Association of Automobile Manufacturers, 2006 saw 7.2 million units produced and sold, with the first 11 months of 2007 already surpassing 8 million in production and nearly 8 million in sales—showcasing a year-on-year increase of over 22%. This growth was driven by favorable economic conditions, rising disposable incomes, and an evolving consumer structure that shifted from basic goods to automobiles.
Even though the market experienced a brief slowdown between 2004 and 2005, the overall trajectory of the "Tenth Five-Year Plan" and "Eleventh Five-Year Plan" periods showed steady progress. With China's economy growing consistently, the shift in consumer preferences toward private vehicle ownership became a global trend. Since 2001, China’s auto production surged from 2 million to 7.2 million units in 2006, with an average annual growth rate of 24%—a pace unmatched in global automotive history.
In 2007, the economy remained stable, with GDP expected to grow around 11.5%, and urban residents’ disposable income rising by about 12.5%. This fueled deeper changes in consumption patterns. Additionally, increased exports—reaching 469,000 units in the first 10 months of the year—helped boost domestic sales, which totaled 7.15 million units during the same period. The export share reached 6.6%, indicating growing international demand.
China’s auto production ranked third globally, behind the U.S. and Japan. While no official organization tracks the exact number of vehicles on the road, the Ministry of Public Security reported that by the end of September 2007, there were over 118 million private motor vehicles in China, with private cars accounting for 61.25% of the total. This placed China second in auto consumption worldwide.
Experts from the China Association of Automobile Manufacturers believe the industry is in a strong upward cycle. For 2008, they expect continued rapid growth, with passenger car sales projected to rise by 20% and commercial vehicle production and sales by 18%. These projections are based on a healthy economy, continued expansion of domestic demand, and the large untapped potential in the auto market. With only 50 cars per 1,000 people compared to a global average of 120, and much lower numbers in China than in the U.S., there is still significant room for growth.
Moreover, the rise of second- and third-tier markets, along with the entry of the first wave of private car owners, will become key drivers of future demand. However, experts also caution that uncertainties—such as tighter monetary policies and concerns over fuel prices—could intensify competition in 2008. Despite this, the long-term outlook for China’s auto market remains positive.
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