Chinese car market down for the first time in 27 months

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According to the latest statistics released by China Association of Automobile Manufacturers (CAAM) yesterday, China’s auto sales in April reached 1.5520 million units, down 15.12% from a month earlier and 0.25% from a year earlier. It’s the first negative growth in China’s auto industry since February 2009. CAAM’s vice chairman Dong Yang warns that the institute’s previously predicted full-year sales growth of 10%-15% may not be realized.

In the first four months of this year, China’s auto sales reached 6.5339 million units, up 5.95% from a year earlier. But the growth is 54.56 percentage points lower than that in the same period of last year. It is such a sharp decline that China’s auto industry suddenly changes from the world’s top position to the bottom in terms of growth. An official with CAAM said anxiously that China and the earthquake-hit Japan are the world’s only auto markets with negative growth.

It’s not only the first negative growth in the past 27 months, but also the first after China’s auto industry recovered from financial crisis. CAAM believes there are five factors affecting the industry growth, including the expiration of the incentive policies and the government’s macro control, continuous rise of fuel prices, influence of the consumption restrictive policies in some city, fuel consumption admission policy, and Japan earthquake.

Affected by the expiration of incentive policies and the consumption restrictive measures taken by Beijing, some families tend to make their purchase in one go. They either buy a high-end car or a seven-seat vehicle. The small vehicle segment is affected most. In April, the sales of passenger vehicles with displacement at 1.6L or below reached 776,300 units, down 16.69% from a month earlier and up 5.30% from a year earlier, accounting for 67.96% of the total sales of passenger vehicles, down 1.19 percentage points from a month earlier and up 1.6 percentage points from a year earlier.

As a major force of the small vehicle segment, China’s local brands were badly hurt. In April, the sales of local passenger vehicle brands reached 502,300 units, down 19.28% from a month earlier and 0.19% from a year earlier, accounting for 43.97% of the total sales of passenger vehicles, down 2.21 percentage points from a month earlier and 1.34 percentage points from a year earlier.