U.S. Auto Sales Lag China’s for Third Month in a Row

The Chinese are moving into the passing lane, making it only a matter of time before they overtake the U.S. as the world’s largest auto market. March sales may well set a record for them, and the winds of change are blowing strong.

China sold 1.03 million cars last month; Americans bought 657,735, down 37% from March 2008 sales of 1.36 million. At three months’ duration, this sales shift looks like a real trend. One reason China’s market remains strong is that its government takes an aggressive role in promoting sales of small, fuel-efficient cars, light trucks, and minivans, especially in rural areas. The U.S. has been slow in this regard, as it has been in recognizing how desperate the auto industry’s situation is.

To counter some of the bad news, GM announced it sold 137,004 vehicles in China in March, up 24.6 percent from the year before. With a fairly wide product group, GM predicts it will double its sales to more than 2 million a year by 2014.

Brilliance BC3

Other companies are eagerly pursuing the Chinese market, which consists mostly of small, regional manufacturers, because their home markets are miserable. Daimler is launching its Smart minicar in China this week, and we will see a host of new cars debut at the Shanghai Auto Show, April 20-28, according to an AP story today.

Of course, the U.S. and Chinese markets are very different, as we’ve indicated, and the per-vehicle profits in China are smaller. But these numbers should scare the pants off even the staunchest Detroit boosters. American automakers not only have to go after an entirely new foreign market now, but must reconstitute, somehow, the utility, desirability, and value of their products for the U.S.

What do you know about Chinese vehicles? Has anybody driven one? Is the quality there?

—jgoods

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