CHINA: Car sales growth fall below initial estimates image

In China, the government ended incentives for purchases and raised fuel prices.

Sales growth in China this year may fail to reach a previous estimate by the China Association of Automobile Manufacturers for a 10 percent to 15 percent increase, said Dong Yang, vice chairman of the association.

In march, China auto market was up 6.5 percent from a year ago to about 1.35 million units, the official China Association of Automobile Manufacturers (CAAM) said on Sunday.
That compared with 967,200 units sold in February, which was up 2.6 percent from a year earlier, according to data provided by CAAM.
SAIC Motor (600104), Dongfeng Automobile (600006) and Chongqing Changan Automobile (000625) were the top three automakers in terms of sales.

However, after two consecutive years of breakneck expansion, China’s automarket is expected to return to a slower, more rational growth pattern beginning this year.

“The overall vehicle sales growth in March was below our expectations,” Zhu Yiping, the Chinese association’s statistics head, said at the briefing in Beijing.

March has historically been a peak period for car sales in China following the week-long Chinese New Year holiday that was celebrated this year from Feb. 2 through Feb. 8, according to the association.

Moreover, an official of the auto manufacturers association said the Chinese auto industry could take a hit if there is an interruption of supplies from Japanese parts makers stricken by the March 11 earthquake and tsunami.
Chinese automakers rely on the Japanese manufacturers for the supply of integrated circuitries and a substantial proportion of other car components.

China passed the United States in 2009 to become the biggest auto market by number of vehicles sold.