The Chinese new car market may slow in the second half of this year as Beijing puts the brakes on economic growth by cutting back on incentives.
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Analysts said several major auto groups have projected a big jump in first-half net profit on record sales but there were signs the market’s expansion had started to slow since May.
The slowdown accelerated in the summer months and, earlier this month, a Chinese government think tank warned the country’s economy would cool further this quarter as incentives disappear.
In July, the new car market grew 13.5% in China, the slowest growth in 15 months.
Reuters said carmakers who have aggressively launched new models or have a wider product portfolio, such as SAIC and Dongfeng Motor, should hold up relatively well.
SAIC makes Buick, Chevrolet, Cadillac and Volkswagen models in joint ventures. Dongfeng operates car ventures with Honda, Nissan and PSA Peugeot-Citroen.
Reuters added that other manufacturers, such as BYD, which sells passenger cars only under its own brand, should brace themselves for a tough ride.
