Dealers in China are taking a downbeat view on market prospects in China, with the China Association of Automobile Dealers (CAAD) warning that a market fall this year could be followed by a recession in the industry that will last for three years.

Vehicle manufacturers, however, appear to see a flat or shrinking Chinese car market in the short-run only, as they continue to invest for long-term growth in the world's largest vehicle market.

The China Daily newspaper reported remarks by company representatives at the Guangzhou Motor Show. It also noted that vehicle deliveries in China from January to October totalled 22.87m, a 0.1 percent dip year-on-year, after sales dropped for four months in a row. Sales of passenger cars fell 1% in the same period to 19.3m units.

The market declines of recent months make it more likely that full-year 2018 will see a sales decline and the China Association of Automobile Dealers has warned that the fall could be as much as 5%, with a market that could be flat at best for the next three years.

However, VW is optimistic, according to remarks reported by the China Daily. "We don't think it (the market) will go again down next year, although of course nobody precisely knows. I personally don't think the current situation will last as long as three years," said Jochem Heizmann, president and CEO of Volkswagen AG's China operations.

Hong Hao, vice-president of Dongfeng Renault, said: "China's car market is hitting a bottleneck, but it remains the largest worldwide, and the demand remains. The market is very resilient: The longer it is contained, the higher the outbreak will be later."

German premium carmaker Porsche said on Sunday that it is "cautiously optimistic" about its performance in China, although the passenger vehicle market is facing uncertainties, the China Daily reported. Jens Puttfarcken, president and CEO of Porsche China, said 2018 will be a new record year for the company.