That’s according to a new detailed province-level forecast now available from IHS Automotive and said to be the first of its kind in the industry.

The report includes passenger vehicle demand for 31 provinces in China and forecasts that passenger vehicle volumes in the country as a whole are expected to rise more than 10 million units by 2026.

The firm added that results of the analysis show that the widely held view of China – namely that Eastern Coastal areas, approaching saturation, will be offset by growth to the West – is overly simplistic with more complex local dynamics likely to play out.

For example, while Beijing and Shanghai are thought to have seen new passenger registrations peak (based on government regulations and license plate restrictions), IHS Automotive analysis shows some remaining medium-term sales growth prospects still remain there. 

The company added that the complexity of market drivers in the Chinese market right now can been seen in recent data out of Guangdong province, one of the largest and more mature provinces, which is seeing car sales growth rivalling the strongest car markets in the world and growing at more than twice the China national average — and faster than the majority of Central and Western provinces.

IHS added that the real market opportunities for automakers come from other parts of China as many provinces will experience a substantial shift in affordability, personal mobility needs, and vehicle development and production capacity improvements between now and 2026.  

As an example, Shangdong, in eastern China, is currently the ninth largest market for passenger vehicles globally, now larger than Italy or South Korea, with additional growth expected. Also in the east, Fujian province was the 66th largest passenger vehicle market globally in 2002, but ranks 36th today, larger than Norway, Peru and Israel combined.  And Qinghai province, which ranked as the 116th largest market in 2002, is ranked 80th today, larger than the automotive markets in Romania or Vietnam.

IHS Automotive also has identified some provinces that will achieve a significant slowdown in sales by the middle of the next decade. Shangdong, for example, was averaging double-digit growth in passenger sales for many years, however this rate is expected to fall dramatically and average below 5 percent growth by 2026.  

‘A solid understanding of province-level growth dynamics is key for future success in China,’ said Lin Huaibin, manager of China light vehicle sales forecast, based in the Shanghai office of IHS Automotive.  ‘The new China provincial forecast provides insight through 2026 and addresses how population dynamics, rapid urbanization and the differential residential density of many large cities will affect vehicle ownership in the future.’ 

The forecast also outlines risks for early market saturation for some provinces but highlights great opportunities for other provinces for many years to come.  Beijing Province, as an example, has had tremendous increases in vehicle sales in recent years.  However, due to congestion, government policies and market maturity, vehicle sales will likely begin to fall within a few years at a modest, consistent pace from the levels they are at today.  While on the other hand, Qinghai, a relatively small vehicle market today, will nearly double in size over the forecast horizon, and will likely continue to grow into the 2030s.