China’s vehicle market may expand 7% this year, roughly matching last year’s growth, although just half the pace of 2013 as the economy slows, an industry body said on Monday.
China’s economy is embracing the “new normal” of slower growth, and the auto market is also entering an era of “stable increase,” the China Association of Automobile Manufacturers (CAAM) told a news conference in the capital, Reuters reported.
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CAAM forecast China vehicle sales, which include passenger cars and commercial vehicles, to grow 7% to 25.1m units this year, in line with economic growth. That is similar to the pace of 6.9% in 2014.
But, Reuters noted, some analysts are more pessimistic, predicting weaker appetite for cars in an economy that may cool further this year, after expanding last year at its slowest in 24 years.
China’s auto market growth could slow further this year, to 3% to 4%, Yale Zhang, managing director of consultancy Automotive Foresight, told the news agency.
“Growth figures will likely be ugly,” he said, citing factors such as continued sluggishness of the economy, a larger comparative base, and dealers’ backlash against automakers.
Chinese dealers of BMW, Porsche and a Toyota Chinese venture have banded together in talks with the carmakers over subsidies and sales targets as they fight over who should bear the brunt of slower growth.
Reflecting diverging fortunes, Volkswagen, which grabbed the top spot last year in a close race with General Motors, has said it is ramping up expansion in China to keep up with demand.
Ford, which has overtaken Toyota in China, also attributed a recent slowdown in sales there to a shortfall in production capacity.
