China reportedly produced 30.5% more cars in May than a year earlier, according to official statistics that show output growth trending lower as efforts to slow the economy take effect.
The three previous months all showed successively slower expansion from a year earlier, Reuters noted.
“The two major factors seem to be tighter control over auto loans, and the Beijing auto show,” Yale Zhang at auto consultancy CSM told the news agency, adding: “People are waiting for new models to hit the market, and also want to see what price cuts are coming.
“Plus, sales rocketed this time last year as people flocked to buy cars during the outbreak of SARS,” he reportedly noted, referring to the deadly Severe Acute Respiratory Syndrome that drove people away from public transport and into private vehicles.
According to Reuters, the country produced 42.6% more cars in April than a year before – February output had been up 62.1%.
May’s production, 215,100 cars, was down 10.2% on April’s, but May is usually weak, because of holidays, the report said, adding that car output is often similar to sales, because exports tend to be insignificant.
Reuters said an economic slowdown may be emerging as carmakers spend $US13 billion to triple capacity in China to some six million units by the end of the decade.
Market leaders Volkswagen and General Motors, which between them are planning to more than double capacity to some three million units by 2008, reportedly have said they were not worried by slowing sales.
Inventory is rising, official figures show, Reuters said, noting that manufacturers and distributors had about 103,000 unsold cars at the end of April, equivalent to about 16 days’ output.
The report said sales figures were not available on Monday but some analysts had speculated on a decline in car sales in May from April of as much as 20%, hit by measures to clamp down on investment.
Reuters said just over two million cars were sold in China last year, almost double 2002, as a decade of rapid economic growth put money in the pockets of Chinese starved of consumables during the country’s Communist era, while analysts expect 20 to 30% higher sales this year than in 2003 as people gradually return to the market.
Car production from January to May came to 1.03 million cars, up 37.6% from a year earlier, according to figures posted on an official government website, Reuters noted.