The menace of creeping car sales growth infects China

Friday 16 September 2011, 17:20 PM by

This time the Chinese car market has broken the plateau of constant hikes in car sales month-on-month as auto sales rose to a mere 4 percent in August. The China Association of Automobile Manufacturers (CAAM) said that 1.38 million vehicles were sold in August, compared with 1.32 million a year earlier. As a matter of fact, the growth in the production of cars has outperformed sales, by rising 8.7 percent as compared to last year.

However, the trend of cooling-off sales growth has been registered recently as China auto sales grew at a rapid pace in 2009 and 2010. The reason behind the positivity in the market was the presence of subsidies and tax cuts, which were meant to help the automobile sector recuperate from the global crisis. Moreover, sales swelled by 32 percent last year and went on to register total sales of 18 million vehicles.

The menace of creeping car sales growth infects China |
The menace of creeping car sales growth infects China

The slow paced growth that has been witnessed in recent months has forced most of the analysts to go easy on their sales forecasts for this year. The analysts are expected to keep the figure below 20 million vehicles or single-digit growth. It is not only China that is facing the crisis, sales in other key emerging markets such as India is also encountering the crunch, that too in a more condemnable form.

Ford Motor China reiterated over the issue of slow growth and said that its sales hiked by 11 percent between January and August to 341,746 vehicles, as compared to the last year. In August, Ford's sales had a downfall of 7 per cent to 34,916 vehicles as compared to last year.

Thus, sales growth of vehicles in the recent time has experienced so many ups and downs that any speculation regarding the future sales performance is hard to rely upon.