Senior figures in the rapidly-emerging automotive industry in China have claimed that its growth this year has been stalled considerably by the global economic downturn, AFP reports today (5th November).

Following growth figures of 25 per cent and 22 per cent in 2006 and 2007 respectively, official estimates have indicated recently that expansion may be closer to seven to nine per cent in 2008.

The slowing demand has been noted by dealerships across the country, with the trend of consumers tightening their purse strings being felt particularly strongly during September.

The Yongta Auto dealership in Beijing, for instance, has reported that sales were down by ten per cent on a year-on-year basis.

"People are waiting for the price to drop," Xiong Tao, a sales manager at the dealership, told the news provider. "People are more cautious with their money."

Volkswagen Group China has also felt the pinch - albeit to a lesser extent - after reportedly seeing sales increase by just 13.1 per cent during the first nine months of the year.

President and CEO Winfried Vahland told AFP: "The downturn in the global economy and natural disasters affected China's auto market to a large extent."

However, the company reported growth of 23.3 per cent in the first six months of 2008, which would appear to suggest that the slump has been most marked in the third quarter.

This is a view supported by Ford Motor China, which has seen vehicle sales grow by just seven per cent and passenger car sales rise by only six per cent so far this year.

President Robert Graziano explained to the news provider: "A number of factors, both internal and external to China, have contributed to the slowdown in the third quarter."

However, with a population of 1.3 billion and only 168 million vehicles on the road - including a paltry 40.2 million cars - the fundamentals seem to be in place for growth to continue in the long-term.



Source:

China car industry may be shifting into slow lane (05/11/08)
http://afp.google.com/article/ALeqM5h0508doM9ziL7XIUFSJhXvc8f6KA