After two years of rapid growth, the Chinese auto market — the world’s largest auto market is expected to cool down mostly because of the absence of incentives for buyers and new credit control rules.
“The growth of new passenger cars in the whole year will only be about four percent,” the Chief Economist and Vice Secretary General of China Association for passenger cars (CPA), Cui Dongshu said on Monday.
China has been the world’s largest auto market since 2009, when full-year sales soared almost 46 percent to 13 million vehicles thanks to favorable policies from the government including tax rebates for small cars. The momentum continued in 2010 as sales jumped more than 32 percent to 18 million vehicles.
But as government stimulus programs expired, growth slowed sharply in 2011 to 3 percent.
“Sales are affected by government policies, including banks tightening lending. We can feel that. Dealer credit and car financing are also tightening,” said Zeng Qinghong, president of Guangzhou Automobile Group Co Ltd , a Chinese partner of Toyota Motor Corp , Honda Motor Co Ltd and Nissan Motor Co Ltd .
In addition, Zhang Baolin president of Chongqing Changan Automobile Co , was more pessimistic, forecasting sales to grow as little as 3 percent in 2012 from 18.5 million units estimated for this year.
Moreover, statistics from China Automobile Trading showed that 712,000 vehicles have been imported in the first three quarters of this year. The figures show that growth rates in the import market are 27 percent, far less than they were last year.