Official figures released by the China Association of Automobile Manufacturers indicated that China's passenger car sales rose 11% in April, the slowest in five months, while US automotive industry research company, CSM Worldwide Inc, forecast that car sales in China will fall below 10% from around 2011, drop further to 5% in 2012, about 3% in 2013 and about 2% in 2014.
Factors behind the expected slowdown include the tighter macroeconomic control measures and the rising oil prices, wages and material prices in China resulted from a sluggish growth of the Chinese domestic economy.
Automobile sales will also be heavily impacted by the higher automobile penetration in China's coastal areas, as well as the polarization in income between the rural and urban areas, CSM forecast.
Output and sales declined
Meanwhile, China Passenger Car Association (CPCA), the semi-official automotive institution, has lowered its expectation on car sales growth this year.
Rao Da, the association's secretary general, said that Chinese car sales were expected to rise by 15% to 16% this year, down from the previous estimate of 20%.
In May, passenger car sales rose 18.1% to 524,920 units from a year earlier. However, the monthly increase rate fell for the second consecutive month, CPCA's statistics revealed. The institution attributed the fall to the tighter macroeconomic control measures.
Two weeks ago, the China Association of Automobile Manufacturers (CAAM) released official sales figures of the same month, which indicated that both output and sales declined month-on-month for the second consecutive month. The findings were similar to that of the CPCA's report.
According to CAAM, China produced 854,100 motor vehicles in May, down 13% from April. It sold 835,500 vehicles, down 9% month-on-month. The weaker demand has triggered speculation of a possible slowdown on the world's second largest auto market this year.
Passenger car sales climbed 22% for 2006-2007 to 6.29 million units, which lagged behind the 25% increase for 2005-2006.
To encourage demand in China, automakers launched more models in the second half. For instance, General Motors will start selling its first hybrid car in China around late July or early August; Volkswagen added the Lavida compact car to its range last month.
