Analysts at LMC Automotive say that a higher than expected rate of sales in the fourth quarter of 2014 will herald a dip to sales growth this year.
LMC said that in December 2014, China’s light vehicle (LV) market exceeded expectations, posting results which indicate a growth in sales of locally-produced models amounting to an increase of 15% in year-on-year (YoY) terms, or 2.32 mn units. The SAAR of total LV sales in the month reached 25.9m units, an increase of 1m units from November, a month during which sales peaked to an all-time high by a considerable margin.
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LMC’s latest analysis also reinforces recent reports that swollen dealer inventory has become an issue in China’s auto industry. LMC said that the dealer-level inventory increase seen in Q4 2014 was the single pivotal factor behind the higher-than-expected passenger vehicle wholesale figures.
The vehicle purchasing restrictions active in China’s largest cities present a further negative influence to car sales in 2015. LMC estimates that could trigger a loss in volume to the tune of 200,000 units when compared to 2014.
The Chinese economy is forecast by LMC to grow by 6.8% in 2015 versus 7.4% in 2014. The economic slowdown will therefore lead to a slowdown in China’s light vehicle sales growth this year to 5.9%, according to LMC.
LMC estimates that the Chinese passenger vehicle market reached 19,708,599 units in 2014, some 13% ahead of the previous year.
