The Chinese Car Market: Oh Lord, Won't You Buy Me A Mercedes Benz

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The Chinese car market, like many things in the world’s most populated country, does not cease to astonish. China has passed Japan as the No. 2 vehicle market in the world, and is now growing faster than even local experts thought it would.

This year, the market will support nine million car sales. According to Reuters, last year, the number was 7.2 million. US car sales this year should come in just above 16 million. At the rate the Chinese market is growing, it could surpass America as the world’s largest market in three years.

And so, it has become the next great battle ground for market share. Right now, GM (GM) and VW have the advantage of being the share leaders. VW now has 18% of the Chinese market. But, according to the FT, "about 85 per cent of Chinese clients are first-time buyers, which makes establishing a strong brand image an especially important factor in China." That means that powerhouse companies like Toyota (TM) still have a chance of roiling the market with strong products and clever marketing.

The battle is really just being joined. He who profits in China will profit overall.

Douglas A. McIntyre