Outlook for China auto market is not optimistic

15:33, May 26, 2011      

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The latest survey conducted by the Gasgoo, a Chinese automotive news website, predicted a negative sales trend in the Chinese auto market for the second half year.

Of the 3,812 auto professionals who took part in the survey this month, 47 percent foresee a low business growth of less than 5 percent— possibly even no growth or a decline, while 40 percent of respondents expect a 5 percent to 10 percent increase, which directly reflects the continuing decline in demand for the first quarter.

At the end of last year, the growth expectation in 2011 was between 10 percent and 15 percent, whereas the recent survey shows that only less than 10 percent of industry experts agree with this perspective — far less than the envisioned growth rate.

An earlier slowdown prediction of China's automobile market is based on the following factors: over-exploitation of market demands, hikes to refined oil prices and rising car costs, purchase tax reduction, withdrawal of government subsidies, surging urban traffic pressure and other macro economic factors. All these concerns have been proven by the facts.

However, the researchers believe that there is no need to worry about the negative impacts brought by the current market condition from the viewpoint of sustainable development and overall industry layout. Despite the downturn of the auto market, up to 78 percent of participants clearly demonstrate the opposition to the government's attempt to intervene and thought the operation of the car market should follow its own laws.
With lower market growth, auto vendors usually will promote sales by means of reducing prices in order to digest inventory and recoup funds. According to the survey, around 70 percent of people believe that a car price war would break out this year, while those who do not believe this idea only account for less than 20 percent.
By People's Daily Online
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