Car sales: all roads lead to China Economic slowdowns do different things to different countries. A good example is what is happening to car sales in India and China, two nations with slowing economies. Sales of cars fell 4 per cent in India in September from a year ago, while almost all carmakers reported double-digit growth in China. That was in spite of the fact that the Chinese car market is almost 10 times bigger than India's. China's car sales are expected to exceed 20m this year. Car buyers" reliance on credit - used in almost 70 per cent of sales - and rising interest rates are the main causes of slowing sales in India. This has led to mounting inventory. Although car finance in China is growing, it is not as widely used, and interest rates are lower. Better infrastructure in China also encourages its population to get on the road. Passenger car sales in China are expected to grow 14 per cent this year and next, reckons LMC Automotive. The rise is being led by first-time car buyers in fast-growing inland provinces where there are only 30 cars per 1,000 people, compared with 123 in China's biggest cities. Sales in the latter still benefit from replacement demand despite car-purchase restrictions aimed at tackling congestion. So car companies have excellent reasons for focusing their efforts on China. Volkswagen, which sells more cars in China than any other carmaker, will expand its joint venture manufacturing capacity there by at least a third to 4m units by 2018. That is more than the entire manufacturing capacity for four-wheeled vehicles in India. VW's China unit sales now make up two fifths of its total global car sales, and its joint ventures alone contribute almost a third of group operating profit. Scale should help that grow further. Suzuki may want to take note. The Japanese group sells four times as many cars in India as it does China. But all roads lead to China.