New | China car sales flat in first eight months, may contract for full year
Passenger car sales fell 3.4pc in August on sluggish economy and stock market rout
China's vehicle sales were flat in the first eight months of the year and may contract for the full year as economic growth slows in the world's largest car market, an industry association says.
Vehicle sales in the period from January to August totalled 15.02 million units, with 136 fewer vehicles sold than in the same period last year, the China Association of Automobile Manufacturers (CAAM), a government-backed industry association, said on Thursday.
Sales in August fell 3 per cent year on year to 1.66 million vehicles, falling for the fifth straight month but slightly improved from a 7.1 per cent decline in July.
Passenger car sales fell for a third consecutive month by 3.4 per cent year on year in August to 1.42 million vehicles. Sales of passenger cars rose by 2.6 per cent in the first eight months of the year to 12.78 million units, the China Association of Automobile Manufacturers data showed.
"There is a chance of negative growth in sales this year," Shi Jianhua, the association's vice secretary general, said.
The mainland's vehicle market had been tough this year as demand weakened amid an economic slowdown, while government measures to limit car purchases had also taken a toll on sales, he said.
The stock market rout since mid-June might leave potential buyers with less cash to spend on car purchases, Shi said.
The association had suggested measures to support the mainland's vehicle market to the authorities, Shi said.
Relaxing restrictions on buying cars in big cities and stepping up the elimination of so-called yellow-label vehicles that fail to meet mainland fuel standards would help create fresh demand, he added.
A study by advisory firm AlixPartners has also forecast a contraction in sales volume in the mainland's vehicle market this year.
Lian Hoon Lim, managing director of AlixPartners, said there were signs of increasing market competition and a much tougher environment as inventories were rising, sales slowing and some carmakers had started to reconsider their production strategies.
"Unless a strong turnaround is logged in the second half of the year, 2015 is likely to be a downbeat year for automakers and dealers," Lim said.
