China posted the third monthly decline in car sales this year in November, and analysts are forecasting that annual growth in car sales will decrease to a single digit for the first time in recent years.
Passenger car sales came to 522,800 units in November, down 10.28 percent from a year earlier, the China Association of Automobile Manufacturers said. Sedan sales slipped 10.94 percent year-on-year to 389,600 units.
Analysts agreed China will have to say goodbye to the 20 percent-plus growth rate in recent years, and said their expectation that sales and production this year will break the 10-million-unit barrier cannot be reached. Passenger car sales stood at 6.16 million units in the first 11 months.
Jia Xinguang, an independent analyst based in Beijing, forecasted 8 percent growth in sales this year, with production reaching 9.5 to 9.6 million units, up from 8.88 million units last year.
Most automakers in the country are unlikely to complete their sales target set at the beginning of this year: FAW-Volkswagen sold 465,600 units in the first 11 months this year, accounting for less than 80 percent of its 600,000 units target for the whole year. Shanghai Volkswagen sold 440,100 units in the same period, 74.6 percent of its target. Shanghai GM fulfilled only 65.4 percent of the whole year target and domestic brand Chery just 65.8 percent.
An anonymous senior executive at China's third-largest automaker Dongfeng Motor Group Co was quoted by Reuters as saying: "Nothing other than a slowing economy, and most of all weakening consumer confidence, can explain declines in the following months." China's economy grew only 9 percent in the third quarter, slipping into single-digit growth for the first time in at least four years.
Under the weight of the global financial crisis, consensus between analysts and automakers is that 2009 will be a tough year for the auto industry.
"A decline is very likely in the first half of 2009, but things could improve in the second half as government moves to relax monetary policy gradually take effect," said Rao Da, secretary-general of the China Passenger Car Association. He cut his estimate for 2008 China car sales growth to 5-6 percent.
Beijing approved a 4 trillion yuan economic stimulus package last month. The measures are expected to help cushion the impact from the global financial crisis, but analysts said it is too early to measure the benefit of such moves for the overall economy as well as individual sectors.
Source: China Daily
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