The global automotive industry is still revving. The laggards, for the most part, are companies in the United States who have been unable to compete with cheap foreign labor and smaller retirement packages at other international companies. As a stark contrast to the huge losses in the United States, Chinese automakers are pumping out more cars than ever and don't seem the slightest bit phased by the international financial crisis.
Government Subsidies Effective in China
There is a large divide of wealth between the cities of China, where the manufacturing centers employ millions, and rural areas, where small families live off the land and their own harvests. The rural areas lack large-scale public transportation, and very few people own their own cars and trucks. However, tax incentives have helped bring personal transportation to the rural populace, where income levels permit very few to own their own cars and trucks.
Minivans Extremely Popular
Everyone remembers the 1990s minivan boom in the United States. For nearly a decade, minivans remained the soccer mom vehicle in the US before being replaced by SUVs, but they're now catching on in China. Bloomberg reported that minivan purchases in March increased by 40% year over year, helped in part by the tax incentives and stimulus cash.
Profits Drying Up, But Still Profitable
As a whole, the Chinese car industry racked up half as much in profits as it had one year ago. However, even with reduced profitability, all of China's firms produce a profit and have the cash to wait out any financial storm.
General Motors Finds Luck in China
General Motors is finding plenty of luck in China, where its partnership with Volkswagen is moving cars off the lot. SAIC Motor Corp., the name of the division that operates in China, rose 77% from its bottom in China's roaring stock market and shows opportunity to continue to grow as its other divisions show slumping sales.
Total Sales Gain
As a whole, China showed a positive 3.88% change in the purchase of new cars. Used cars or other private sales are not calculated, though analysts expect that number may have also increased. While the world may be fighting off lower automotive sales, China's still revving in high gear.