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China auto sales disappointing

January 11, 2013

SHANGHAI, Jan 11: Auto sales growth in China, the world’s biggest car market, fell short of expectations last year, an industry group said on Friday, as the economy slowed and cities put limits on vehicle numbers.

Sales rose 4.3 per cent year-on-year in 2012 to 19.31 million vehicles, the China Association of Automobile Manufacturers said, well below forecasts of eight per cent.

While the figure is up from 2.5 per cent growth in 2011, when 18.51m units were sold, it is a fraction of the explosive 32 per cent rise seen in 2010. Slowing domestic economic growth, limits on car numbers and a political row between China and Japan that hurt sales of Japanese-brand cars weighed on the Chinese auto market last year, analysts said.

In July last year, China’s booming southern city of Guangzhou capped the number of cars by limiting licence plates, following in the footsteps of Beijing and Shanghai. Klaus Paur, Shanghai-based global head of automotive for market research company Ipsos, said overall auto sales were hurt by a fall in commercial vehicles as China’s economy slowed.

He estimated that limits on cars by cities concerned about pollution and congestion shaved one to two percentage points from sales growth of passenger cars. Last year, China’s sales of passenger cars alone rose 7.1pc to 15.50m vehicles, the association said in a statement on its website. “It’s still a quite healthy demand for passenger vehicles,” Paur told AFP.

“Overall, this paints quite a good picture for development in the China market.” Japan’s top three automakers — Nissan, Toyota and Honda — said this month that annual sales in China fell last year due to a consumer boycott after Tokyo nationalised islands also claimed by China.

The association said Japanese brands — not including imports — accounted for 16.4 per cent of total passenger car sales last year, down from a market share of 19.4 per cent in 2011. But other foreign auto makers have filled the gap, helped by stronger brand recognition than local players and perceptions of better quality.

The US auto giant General Motors has tipped its full-year sales in China for 2012 to set a new record by surpassing the 2.55m vehicles it sold in 2011. Cui Dongshu, deputy secretary general of another industry group, the China Passenger Car Association, forecast passenger car sales would grow at least 10pc this year.—AFP