Market forecasters at LMC Automotive are projecting that the Chinese light vehicle market will grow by 10% to top 21m units in 2013.
In its latest projections, LMC notes that sales of vehicles in the first two months continued to gain momentum, extending a rebounding trend which began in the fourth quarter of last year. Year-to-date light vehicle sales rose by 17% on last year to 3.43m units.
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In a research note, LMC said that the further acceleration in light vehicle sales was ‘underpinned by recovering economic growth and thus improving consumer sentiment’. LMC also said that dealer inventory is low, providing room for wholesale acceleration at the beginning of the year.
LMC expects a ‘normalising’ Q2 to follow the robust Q1 sales.
Manufacturer detail shows that the first two months of the year were especially strong for the top three brands: Volkswagen (+41%), Wuling (+26%) and Hyundai (+43%). Toyota and Nissan sales were dented by the effects of anti-Japanese sentiment with passenger vehicle sales in the first two months down by 17% and 30% respectively.
LMC analyst John Zeng also drew attention in his research note to the slow progress of so-called ‘new energy vehicles’ in the Chinese market. Despite high hopes arising from government subsidies for the purchase of electric vehicles, Zeng notes that cities across China have launched their own new energy development plans that amount to ‘local protectionism’ favouring locally made vehicles.
“If central financial subsidies continue to be used alongside local protection subsidies, a major side effect will be fragmentation of the new energy vehicle market, while the commercial prospects of NEV will become further and further away,” said Zeng.
