Auto sales in China rose by 6.7 per cent on a year-on-year basis over the duration of 2008, according to reports published today (12th January).

Figures released by the China Association of Automobile Manufacturers (CAAM) illustrate that there were a total of 9.28 million units sold in the country in 2008.

However, the increase was modest compared to results for the previous three years - which had seen rises of over 20 per cent - and is also the lowest rate since back in 1999.

Concerns over the industry are growing to such an extent that the Chinese government is set to launch an unprecedented policy package in the near future, designed to keep sales growth above ten per cent.

Chen Qiaoning, an analyst with ABN AMRO TEDA Fund Management, told Reuters: "The auto industry has entered a brutal winter. There are no signs of recovery so far, but if the government's auto stimulus package comes out soon, we will at least see positive growth for the full year."

The CAAM figures also showed that passenger car sales in the country grew by 7.27 per cent in 2008 to 6.76 million units, following a fall of 7.99 per cent in December.

Meanwhile, new data released today by the Society of Indian Automobile Manufacturers reveal that passenger car sales in India declined by seven per cent last month on a year-on-year basis.

A total of 82,105 vehicles were sold during the month as banks further tightened their lending criteria - a statistic which also represents the fifth decrease in the past six months.

The Indian government has announced two stimulus packages in the past month as it looks to tackle demand which has been crippled by rising job insecurity and the economic downturn as a whole.

As VG Ramakrishnan, Senior Director of Transport and Logistics at Frost and Sullivan, explained to Bloomberg: "Consumer sentiment is badly affected. For a minimum of 12 months, there will be pain."

Nevertheless, the country still managed to post a full-year sales increase of two per cent to 1.2 million units, according to the news provider.

Sources:

China 2008 auto sales rise 6.7 pct -Xinhua (12/01/09)
http://uk.reuters.com/article/consumerproducts-SP/idUKSHA10983620090112

UPDATE 1-China 2008 car sales growth slows as economy ebbs (12/01/09)
http://www.reuters.com/article/marketsNews/idUSSHA36121620090112?sp=true

India's December Car Sales Slump 7% on Tighter Credit (Update2) (12/01/09)
http://www.bloomberg.com/apps/news?pid=20601091&sid=aP6rVaXLLRvE&refer=india