Chinese carmakers cut sales forecast as growth stalls
Stock market rout and economic downturn blamed for depressing demand, as trade body projects lowest full-year increase since 2011
The national carmakers association cut its growth forecast for vehicle sales this year after a slower-than-expected first half as stock market turmoil depressed demand.
The China Association of Automobile Manufacturers (CAAM), a government-backed industry group, said yesterday it expected full-year sales - including both passenger cars and commercial vehicles - to increase by 3 per cent this year, the lowest increase since 2011.
The association in January projected sales to grow by 7 per cent to more than 25 million, after posting a 6.9 per cent increase last year.
Vehicle sales on the mainland grew by 1.4 per cent to 11.85 million units in the first half of this year.
Passenger car sales in that period increased by 4.8 per cent to 10.09 million vehicles, though commercial vehicle sales declined by 14.4 per cent to 1.75 million units.
Dong Yang, secretary general of CAAM, said the market would probably recover a little in the second half of the year if the stock market stabilised.
"The stock market has some impact on consumers' cash flow, and I noticed that fewer people visited [dealerships]," Dong said.
He added that the economic slowdown had also dented consumers' demand.
"It would be nicer if consumers spent their extra money on buying cars for their own use, rather than investing in stocks," he said.
He added: "[Whether] the stock market goes up or down, there will be some negative impact on car sales."
He said the growth in passenger car sales this year would probably be about 6 per cent - short of the 8 per cent forecast by the association at the beginning of the year.
The stock market rout and economic slowdown took a toll on passenger car sales in June, with deliveries falling 3.4 per cent from the previous year to 1.51 million cars.
This was the first year-on-year decline since February 2013 when passenger car sales fell 8.3 per cent because of the week-long Lunar New Year holiday.
Zhang Zhiyong, an independent industry observer, said he expected the passenger car market would continue to contract this month as the stock market turmoil would weigh on sales in the short term.
"The economic weakness will have a longer term effect on the auto market as consumers are tightening their spending as they are uncertain about their future salary growth," Zhang said.
A full-year sales growth of 3per cent would be more achievable given the present economic headwinds, he said.
