Passenger car sales down 8pc in December
Mainland passenger car sales fell 8per cent to 584,600 units in December, according to the China Association of Automobile Manufacturers, the fourth decline in the past five months as the industry battles slowing demand.
For the full year, sales rose 7.3 per cent to 6.76 million.
The association had expected total sales, including trucks and buses, to exceed 9.3 million units last year, growing 5.68 per cent from 2007.
Except for October, the traditional peak season for buying cars during the golden week holiday, the mainland recorded monthly sales declines in August, September, November and December as the sliding A-share market damped consumption.
With the slump in car demand, mainland media yesterday suggested a rescue package for the vehicle industry would be rolled out this week. But industry sources said different government departments were still co-ordinating possible policies to revive the industry.
'The government will surely cut the consumption tax for small-engine cars, but the Ministry of Industry and Information Technology and the Ministry of Finance are deciding how much the reduction should be,' said analyst Zhang Xin at Guotai Junan. 'It's not an easy issue and I think the government will take some time to fix that.'
A government official quoted by Reuters yesterday said supportive measures for the industry would be discussed at a State Council meeting tomorrow.
The mainland vehicle industry has suggested the central government reduce the 10 per cent consumption tax on low-emission vehicles. Under one set of proposals, the tax on vehicles with one-litre engines or smaller would be lowered to 2 per cent. Another proposal is to eliminate the consumption tax on cars with 1.6-litre engines or smaller.
Global carmakers, such as Volkswagen, General Motors Corp and Toyota Motor Corp, have all recorded lower sales growth in the mainland vehicle market.
Volkswagen, the biggest overseas carmaker in China, boosted sales in the country 12.5 per cent compared with a 28 per cent increase in 2007. GM's 2008 China sales growth slowed to 6 per cent from 19 per cent a year earlier.
Toyota, the fast-growing global carmaker in China, recorded 17 per cent growth last year, far below its 62 per cent in 2007, while Anhui-based Chery Automobile missed its yearly growth target by 15.24 per cent, selling 356,000 vehicles.
Monthly sales fell in August, September, November, December
For the whole of last year, passenger car sales on the mainland grew: 7.3%