Automobile industry growth to decrease this year, CPCA says

Gasgoo.com (Shanghai March 9) -February is bound to be a rough month for the Chinese automobile market, statistics released by the China Passenger Car Association (CPCA) revealed. According to a story by theBeijing Morning Posttoday, growth in the market is expected to be lower then 10 percent, a drop of more than 35 percent from last month.

CPCA Deputy Secretary-General Cui Dongshu said that the rapid unveiling of purchase restriction policies in Beijing last December were the biggest factor in putting a halt to Chinese car sales. Many other cities were now considering implementing similar measures.

Mr. Cui pointed out that due to Beijing'sprominent position in the Chinese automobile market, with 7 percent of all domestically produced and approximately 11 percent of all imported vehicles being sold there, the sudden introduction of new purchase restriction legislation there were of great importance to the entire country. Overallgrowth in the national automobile industry is expected to have dropped 3 percent as a result.

Largesales orders placed last year that are still waiting to be fulfilled are also a large factor behind the slow growth in 2011. Mr. Cui predicted the post-holiday drop in sales to last until around August of this year. With buyers losing interest in the market this year, price wars may again start between automobile manufacturers, further contributing to decrease in growth.

Source