China first to consume 20 million vehicles a year, annual sales rise by 14%

BEIJING: China became the first country in which more than 20-million vehicles were sold in any given year as Toyota Motor to General Motors and Volkswagen delivered a record number of cars there. Total deliveries rose 14% to 21.98-million units last year and may exceed 24 million in 2014, the state-backed China Association of Automobile Manufacturers said on Thursday in Beijing. Last year’s sales of passenger vehicles, excluding buses and commercial trucks, climbed to 17.93-million — or 15% more than the US auto industry — and may increase 9% to 11% this year, it said.

While China’s motorization has been a boon for foreign automakers -- all the major ones saw record sales in the country in 2013 --pressure is building on the government to step in as pollution chokes residents and traffic congestion turns roads into parking lots. With air quality deteriorating so much that children and the elderly are regularly warned to stay indoors, Beijing is tightening its vehicle quotas and Tianjin is capping the number of licenses issued this year. "As more and more big cities put in place restriction measures, automakers will have to count on smaller cities and inland areas for growth," said Harry Chen, a Shenzhen-based analyst with Guotai Junan Securities Co. "Local automakers will really need to bring on their A-game to compete with foreign joint ventures to survive."

GM, which counts China as its biggest market, saw sales climb 11 per cent to 3.16 million in the country last year. Though the Detroit-based carmaker outsold all foreign automakers in China for eight straight years, it may lose that lead when Volkswagen reports 2013 figures later this month. The Wolfsburg, Germany-based company surpassed its previous annual record by selling 2.96 million vehicles in the first 11 months. Ford, which got a late start in China, benefited from the popularity of its Focus car, helping the company post the biggest growth among major foreign automakers.