China’s July Growth, A Sign of Economic Weakness image

China’s auto sales growth begins to decrease with an increase of only 11% in July, compared with 15.8% in June.

In July China managed to sell 1.12 million passenger cars, up 11%, and a total of 1.38 million vehicles, up 8%, from 10% in June. Since 2009 and 2010 when government offered subsidies and cut taxes to respond to the global crisis, sales have begun to fall and the economy’s rapid expansion slowed.

“The data show the slowing trend has not changed, and it will be more difficult in the second half of the year,” said Jia Xinguang, an independent auto industry analyst in Beijing.

This decrease means a setback for global car makers who now see China their only hope to restore sales after sales in Europe and the US slowed. GM and Ford were the only companies to report July sales increasing faster than the overall industry. GM’s sales in China were up 15.1% to 199,503 vehicles and Ford’s sales increased 32% to 42,560 units.

Although analysts expect an economic increase of 8% this year, which will be higher than the European and the US levels, it will still be smaller than China’s double-digit rates of recent years. Some even believe that the rise will be only 5%, compared to 2009’s explosive 45.5% rise and 2010’s 32.4% increase.