Passenger car Sales in China suffered a decrease of 1.44% in September 2008, mainly due to the financial crisis, scarcity of mortgage, inflation, vehicle purchase tax and high fuel prices.
According to the China Association of Automobile Manufacturers, sales of passenger cars in the country declined 1.44% to 552.800 Units in September 2008 over the past year, as reported by SteelGuru.
The ordinary vehicle sales fell down by 2.32% to 416,000 Units in September 2008 on YOY basis. Sales of Multi-Purpose Vehicles (MPVs) too slipped by 31.30% to 15,000 Units. Conversely, sales of Sport-Utility Vehicles (SUVs) and crossover vehicles went up by 7.35% and 7.74% to reach 37,000 Units and 848,000 Units respectively during the same period.
Furthermore, during the period of January to September 2008, sales of MPVs came down by 6.66% to 416,000 Units. However, sales of passenger cars went up by 22.49% in September 2008 over August 2008.
The deceleration in car sales in China is attributed to the economic crunch that originated in the US. It has led to a decline in stock markets worldwide, which, in turn, has affected the Chinese automobile industry. Additionally, global mortgage crisis, inflation and weakening consumer confidence are also responsible for the decreasing car sales.
Other factors that brought the automobile sales down in China are the readjusted vehicle purchase tax and increased fuel prices. Also, after the implementation of the Anti-Monopoly Law in August 2008, consumers are expecting a reduction in price. Thus, they have delayed their purchase plans, leading to a drop in automobile sales.
China is expected to face a further slowdown in the automobile sales in coming months because of the worsening economic situation. Also, the mounting material costs would affect the industry adversely as it would ultimately lead to an increase in the final price of automobiles. And if industry experts are to be believed, the automobile sales will not bounce back until the economic recovery.
According to the Research Analyst at RNCOS, “Mostly all the automobile industries of the world are affected by economic volatility and Chinese automobile industry is not an exception. This downturn is certainly going to put negative impact on the industry players and probably some weak brands and players may be forced out of the market. Further, the local car manufacturers having small profit margins will be highly affected.”
Related Market Research Reports:
Indian Automobile Sector - A Booming Market
Global Hybrid Car Market Forecast to 2010
Slovakia Automobile Sector Analysis
