Car sales in China leaped 75.3% in 2003, but output is expected to brake dramatically in 2004, underscoring worries of a slowdown in the world’s fastest-growing major auto market, Reuters reported, citing an industry group.
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The report said car sales, which raced past the 1 million-unit barrier for the first time in 2002, reached a record 1.97 million units in 2003.
Car output overtook sales with an 83.3% surge to break the two million mark, the industry body added, prompting fears of overcapacity as both local and foreign carmakers step up production, Reuters added.
According to the report, the China Association of Automobile Manufacturers said in a statement posted on its website that output should rise just 26% to 30% in 2004 to 2.5 to 2.62 million units.
Reuters noted that foreign automakers such as Volkswagen and their Chinese partners have announced capacity increases that could lift annual production to about 2.28 million vehicles by 2007 while analysts have warned of an impending margin-eroding glut, with both local and foreign carmakers racing to ramp up output. Many carmakers have slashed prices this year as the market grew increasingly competitive, the report added.
“To trim inventories, domestic automakers strengthened marketing efforts in December and boosted car sales,” the association reportedly said, without giving further details.
Reuters said that overall sales of vehicles – including cars, trucks and buses – rose 34.2% to 4.39 million in 2003.
In December, car sales more than doubled to a monthly record of 227,300 units, while total vehicle sales in the month rose 58.4% to 456,000 units, the report added, noting that output and sales figures are usually similar because of the low quantity of cars imported or exported.
