China car sales forecast to slow gains this year

CHINA Passenger Car Association has lowered its forecast on car sales growth this year as tighter macroeconomic controls may dampen purchases by companies and individuals.

Chinese car sales are expected to rise by 15 percent to 16 percent for this year, down from a previous estimate of 20 percent, Rao Da, secretary general of the semiofficial automotive institute, said in Shanghai yesterday.

Domestic car makers delivered a combined 5.99 million passenger cars including sedans, sport-utility vehicles, multipurpose vehicles and minibuses in China last year, excluding exports, CPCA's figure showed.

"The austerity measures are likely to cut the growth of gross domestic product to 10 percent, leading to a slowdown in the increase of companies' income and personal wages," said Rao.

"In addition, the less optimistic outlook is also based on a higher base figure last year with the maturing of the market."

In May, passenger car sales rose 18.1 percent to 524,920 units from a year earlier. However, the monthly increase fell for the second consecutive month, CPCA's statistics unveiled. Official figures from China Association of Automobile Manufacturers are due next week.

The devastating earthquake in Sichuan Province on May 12 has been blamed for declining demand. But analysts agreed it won't have a lingering impact on auto sales.

"There is no major production by car makers and auto parts suppliers in the quake-hit areas," Rao said, forecasting the growth of the industry will only be slowed by less than 0.5 percent.

Chang'an Ford Mazda shut production in its factory in Chongqing for half a day and it said the loss could be easily made up by extra shifts.

Total car sales climbed 14.7 percent to hit 2.8 million units for the first five months while production expanded 18 percent to 3 million vehicles.

Among the top 10 best sellers, FAW-VW ranked top with sales of 41,796 cars. Second and third were Shanghai Volkswagen and Shanghai GM with 38,119 units and 34,298 respectively.

The rest were Beijing Hyundai, Guangzhou Honda, Dongfeng Nissan, Tianjin FAW Toyota, Chang'an Ford, Dongfeng Peugeot Citroen and Chery Automobile Co Ltd.