Chinese auto market to expand 8-10 % in 2014 image

An industry body said China’s vehicle market is expected to expand 8-10 % this year, slightly slowing from a 13.9 % growth in 2013, as efforts to rein in pollution threaten to hit demand in the world’s biggest auto market.

The prediction by the China Association of Automobile Manufacturers (CAAM) nevertheless points to a continuing rebound in a market that saw growth slow as low as 2.5 % in 2011.

“Geopolitical changes could result in high oil and raw material prices, which would sap vehicle demand,” CAAM’s deputy secretary general Shi Jianhua told a news conference. “Other adversaries include backward city infrastructures, bad urban planning … and resultant problems such as pollution and traffic congestion.”

China’s vehicle sales growth rate plummeted in 2011 and 2012 to 2.5 % and 4.3 %, respectively, after a decade of rapid growth when auto demand often surged as much as 30 to 40 % a year.

In 2013, vehicle sales in China rose 13.9 % to 21.98 million units, CAAM said, beating the industry body’s forecast of 7 % growth. The recovery was partly aided by a rebound in sales of Japanese cars, whose China sales had slumped in 2012 due to anti-Japanese sentiment triggered by a territorial dispute.

Via Reuters