China's auto prices to continue markdown in H2

Shanghai, July 28 (Gasgoo.com) The prices of vehicles in China's auto market went down gradually in the first half of 2008, and this markdown trend will continue in the second half, though it's likely to be slower than in H1, said China Business News today.

From January to June, the auto prices in China underwent a steady decline trend amid the soaring oil prices and raw material costs, and due to natural disasters such as the snowstorms and earthquake. This downturn of car prices will continue gradually but a little slower in the second half of this year, as a result of the higher fuel prices, bank loan austerity, the mounting market supplies, slowing demands and many other factors.

Industry analysts said that China's current auto market is nearing saturation point, with supplies to exceed the demands. Many car makers and dealers will have to boost their sales mainly by marking down prices of their products. Although the pressures from the rise in operating costs and the consumption tax will make the car prices fluctuate for a certain period of time, the downturn trend in car prices will continue in the six-month period as a whole.

According to the latest monitoring results in 36 cities by China's auto industry regulator, the the prices of home-made cars in the first six months declined by 3% year on year, and in June alone the prices went down by 2.63% y/y. It's hard to reverse this trend in the rest of 2008.