After a 28m unit market and 14% growth in 2016, the China Association of Automobile Manufacturers (CAAM) has said it expects the vehicle market to slow to 5% growth in 2017.
Analysts says that the auto market will cool due to a higher purchase tax (after a temporary reduction last year) and a slowing Chinese economy. There will also likely be a ‘payback’ period of lower demand following a rush to buy cars in the final quarter of 2016 – a mini-boom that was encouraged by manufacturer and dealer incentives,
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According to Reuters, Volkswagen also expects the Chinese auto market to grow at around 5% in 2017.
A bright spot in the market is new energy vehicles, including EVs. Subsidies offered by the government will continue to be an incentive for buyers of new-energy vehicles.
CAAM said new-energy car sales grew by 53% last year to 507,000 units.
China New Energy Vehicle Report
The Chinese government is expected to post quarterly economic growth figures tomorrow (January 20th) that will confirm slowing economic growth of around 6.7% – on an annualised basis.
