Published on : Aug 13, 2015
Industry figures have revealed that China’s auto market slumped in July with sales shrinking by 6.6%. China is the biggest automobile market in the world. According to the China Association of Automobile Manufacturers (CAAM), only 1.3 million cars, minivans, and other passenger vehicles were bought by the Chinese consumers in July. In 2009, the automobile sales growth in the country had reached a peak at 45%. However, it has declined gradually with the economy in China cooling down and cities imposing ownership limits to reduce pollution. The decline in auto sales in the recent months has been worse than expected with the leading auto manufacturers in Chinese market such as Great Wall Motors, General Motors Co., and Volkswagen AG bearing the brunt of the slump and cutting prices to float in the market.
The global auto manufacturers have invested massively in the Chinese market to appeal to the customers. General Motors has announced last month to develop models in partnership with China’s Shanghai Automotive Industries Corp., to expand in the automotive markets in India, China, Brazil, and other developing nations. The car manufacturer’s initiative is expected to be worth US$5 billion.
The auto sales numbers contracted by 3.4% in June and the further dip in the numbers in July has made industry analysts to drastically cut down their forecasts regarding expected sales growth. Earlier, it was estimated that the auto sales growth would be up to 8% this year. However, it has been reduced to merely 1.7%. CAAM has revealed that the total vehicle sales in China reduced by 7.1% in July. Though the scenario looks depressing, some vehicle types have still registered positive growth. For example, sales of SUV increased by 34.2% to 393,000 vehicles. With the government favouring the growth of the Chinese automotive brands through various regulations, sales of Chinese auto manufacturers have increased by 5.1%.