Low-emission car sales may fall in the end of 2011

Gasgoo.com (Shanghai September 29) - The market for low emission cars (1.6 L or smaller) will probably contract next month, with possible negative growth in the end of the year, China Passenger Car Association Secretary General Rao Da said at a summit discussing automobile policies and market research yesterday, China Securities Journal reported. The summit was a joint collaboration between the CPCA and the China Automobile Dealers Association.

Earlier this month, the Ministry of Industry and Information Technology, the National Development and Reform Commission and the Ministry of Finance announced that the current subsidy policies for new energy vehicles will be effective until the end of the month, after which they will be replaced by more stringent measures limiting the number of cars eligible. The new rules will see the maximum fuel economy limit for cars covered decreasing from 6.9 liters per 100 km to 6.3 liters. Many consumers, therefore, are rushing to purchase new energy vehicles while they are still covered, the effects of which are most apparent in the low emission segment. According to Mr. Rao, there were already 500,000 cars sold in the first two weeks of the month, with low emission cars making the bulk of that amount. That number may very well be higher in the end of the month. 

Meanwhile, September being the final month of the third season, manufacturers have additional pressure to unload inventories. Mr. Rao sees sales of over 1 million passenger vehicles this month as possible this month, but does not predict that number to surpass 1.1 million.