US based carmaker General Motors said China’s auto industry is poised to rebound from its worst four-month slump in 14 years as consumers return to car dealerships during the second half of the year.
“I’m still pretty optimistic it won’t take much to bring them back into buying mode,” Kevin Wale, head of the automaker’s China operations, said in an interview in Shanghai Wednesday.
“I can’t see anything in the Chinese environment that’s leading to an unusual decline in consumer confidence.”
The China Association of Automobile Manufacturers recently forecast an 8 per cent rise in total mainland vehicle sales this year. That should be enough to allow a tidy profit by dealers – unless Chinese consumers are much more spooked by the Chinese economic slowdown than they appear at the moment.
However, China will soon resume paying subsidies to rural residents who trade in old vehicles for new, fuel efficient ones amid a slowdown in the world’s largest auto market, a governmentofficial said Monday, without revealing a time table.
China’s slowdown worsened in May as its factories saw a further deterioration in demand at home and abroad, dealing a new blow to a global economy struggling with a sharp downturn in Europe and a faltering recovery in the United States.
China’s export-driven economy has begun to slow this year, posting growth of 8.1 percent in the first quarter compared to 9.2 percent in 2011 as a whole, as woes in key European and US markets hit overseas sales.
In addition, Chinese dealers are struggling with the rising number of unsold cars that’s threatening to deepen price cuts, according to the nation’s biggest automobile dealers’ association.
Demand was the slowest in the first four months since 1998, weighing on automakers from General Motors Co. to Volkswagen AG, which are counting on the world’s largest auto market to offset slumping sales in Europe.