Automakers are betting big on the Chinese market after the country’s government announced that it would ease its one-child policy.
With parents now able to have two children, automobile makers are betting that they will opt into bigger vehicles, specifically family friendly mini-vans.
Mini-vans showed up in throngs at the Guangzhou auto show, where Volkswagen AG presented a supersized version of its Touran and Guangzhou Automobile Group subsidiary GAC Motor showcased a prototype mini-van.
Seven seat mini-vans make up just 10% of passenger cars in China, but analysts say that segment is growing faster than the rest of the auto market.
These seven-seaters currently account for just 10 percent of passenger car sales in China, but sales are growing at a faster pace than the entire auto market, the world’s largest. Multi-Purpose Vehicle sales, of which mini-vans are a part, for the first 10 months of the year grew 7.8%. The overall car market grew by 1.5%.
Chinese authorities hope the relaxation of the one-child policy will help increase its population from 1.37 billion at the end of 2014 to 1.45 billion by 2030.
“After the roll out of the two-child policy, I believe the market share of 7-seat SUVs and MPVs will further strengthen,” Wu Song, GAC Motor’s general manager, told Reuters.
The cost of owning two vehicles in China is high, which makes a large 7-seat mini-van all that more attractive to citizens who decide to have a second child.