China expects auto sales growth to keep slowing in 2005

[24 ]

BEIJING January 24, 2005; The AFP reported that Chinese auto sales are likely to continue to slow in 2005, and the stellar growth seen early this decade will probably never return, state media said, citing a leading industry analyst.

Total vehicle sales are likely to rise by about 12 percent this year to 5.8 million, Xinhua news agency reported, quoting Xu Changming, a ranking official at the government think-tank the State Information Center.

The "blow-out growth" of 2002 and 2003 will never come again, Xu said.

Twelve percent growth would be welcome news in most countries' auto markets, but in China, it is down from 15.5 percent in 2004 and 34.2 percent in 2003, according to previously released data.

Passenger car sales are expected to fare slightly better, with an increase of 17 percent this year, compared with 15.2 percent in 2004.

But that, too, is a weak echo of roaring growth seen in 2003, when passenger car sales sped ahead with growth of 75.3 percent.

Slowing growth reflects a gradually saturated market especially in the cities, where more and more middle-class families have now achieved their dream of owning a car.

It also reflects government efforts to slow down overheated industries, including the car sector, with the introduction last year of stricter rules on auto loans.

As China dismantles its tariff barriers to implement promises to the World Trade Organization, car prices keep falling, making some families postpone buying a car in hopes of a better deal later on.