Recruiting in China

The vehicle market in China is expected to grow at about 7 percent this year and the low car penetration rate offers great potential, said Geoff Broderick, vice president and general manager of Asia-Pacific Automotive Operations at consultancy J.D. Power.

Compared with developed markets like the US, the car penetration rate is "tiny" in China, especially in lower-tier cities, so the consultancy is very "optimistic" about market growth, Broderick told the Global Times during an exclusive interview on Saturday.

The development of vehicle financing also offers potential, since only some 30 percent of Chinese consumers use financing, while in the US, "very few people buy cars for cash," he said.

Broderick noted that the strong momentum seen in the sport utility vehicle (SUV) sector will continue, as Chinese consumers generally prefer roomier cars. Low oil prices are supporting that trend.

First-quarter vehicle sales in China rose 5.98 percent year-on-year, with SUV sales surging 51.46 percent, data from the China Association of Automobile Manufacturers (CAAM) showed.

Broderick noted that as the base number gets bigger, it will be hard to maintain double-digit growth, so the consultancy views the current growth rate as "healthy."

He said that 2015 was a watershed year for the industry in China.

"Until recently, all car manufacturers could basically sell whatever they could produce [in China], but now there is much better alignment between supply and demand."

Last year, domestic brands accounted for about 41.32 percent of China's passenger car market, up 2.86 percentage points over 2014, CAAM data showed.

J.D. Power experts said these brands will continue to see strong growth, with improving quality.

"The quality of cars made by domestic auto brands is expected to be able to match that of joint venture automakers by about 2018," Wang Qinghua, research director at the Analytical Center of Excellence at J.D. Power, told the Global Times Saturday.

But Broderick noted that Chinese brands still need to build their brand images and improve customers' experience, where they still lag behind joint venture brands.

Broderick also see bright prospects for new-energy vehicles (NEV) in China.

"Chinese consumers are more open to embrace new things," thus the adoption rate for NEVs in China will be faster and domestic brands may take a leading role, Broderick said. "But the challenge is building infrastructure."