China auto sales forecast to grow by 5% in '09

Shanghai, December 9 (Gasgoo.com) China's passenger car sales dropped 10.3% in November from a year earlier as slowing economic growth dented consumer confidence. In this situation, automakers are not optimistic about the market in the short run and forecast that the auto sales in China will grow by 5% or lower in 2009.

After sales in October rose 8.4% from a year earlier, sales of passenger cars in November totaled 522,800 units, down 2.9% from the previous month and down 10.3% from the same month in 2007 said the China Association of Automobile Manufacturers. Sales of sedans fell almost 11% to 389,600 units year on year, while sales of MPVs dropped 30% to 14,400 units. SUV sales fell 3.6% y/y to 35,000 units.

Dongfeng Nissan was among the few automakers to see sales rise: Its passenger car sales rose 60% in November from a year earlier to 33,417 units. Most automakers see no hopes of boosting their sales by the year end and have to scale down this year's sales targets. Only a couple of companies will be able to achieve more than 80% of their previously set goals.

The market slump is expected to carry over into the coming year 2009, industry analysts predicted. The Chinese auto market will see further negative growth over the next few months until the recovery may come in July. In the first half of next year the auto buying power will remain low, and most automakers predicted that the whole year auto sales of 2009 will grow by no more than 5% in the Chinese market.

Amid the financial crisis and other factors, China's industry group has cut this year's auto sales projection of 10 million units to about 8 million for the country's automakers. It is still early now for them to set the auto sales goals of next year as the market is still erratic and always sluggish. The glimmer of hope they saw in October faded out only one month later.