China's 2008 auto sales growth hits 10-year low

(Xinhua)
Updated: 2009-01-12 22:06

BEIJING - Chinese auto makers reported a 6.7-percent rise in sales in 2008 compared with the previous year, the lowest rise in 10 years, China Association of Automobile Manufacturers (CAAM) said on Monday.

The growth rate was 21.84 percent in 2007.

The sales totaled 9.38 million units last year in the world's second largest car market after the United States, the CAAM said.

The figures released by the CAAM included auto exports, but did not cover sales of imported cars on the domestic market.

The country's auto makers rolled out a total of 9.34 million vehicles last year, up 5.21 percent compared with 2007.

Both auto sales and production, however, were below the prediction of 10 million units made at the beginning of last year.

Sales of passenger cars, including sedans, multipurpose vehicles and sport-utility vehicles, reached 6.76 million units in 2008, up 7.27 percent year-on-year, according to the CAAM. The increase was 14.41 percentage points lower than 2007.

Sedan sales topped 5 million units, up 6.78 percent year-on-year, with the FAW Volkswagen, Shanghai Volkswagen and Shanghai General Motors being the top three sellers.

In December, passenger car sales fell 7.99 percent from the December the previous year to 584,600 units. The figure, however, represented a month-on-month increase of 11.81 percent.

The December figure for sedan sales was 452,400 units, down 6.89 percent from a year earlier. Multipurpose vehicle sales decreased 36.89 percent annually to 13,900 units, but sport-utility vehicle sales were up 5.7 percent to 40,600 units.

China's auto industry, although less affected by the global financial crisis than foreign counterparts, would face tougher conditions without government aid as the crisis unfolded, industry analysts said.

Profits in 19 major domestic auto producers totaled 65.6 billion yuan (US$9.6 billion) in the first 11 months last year, down 0.53 percent from 2007, according to CAAM.

The government was planning stimulus measures to support 10 major industries, and plans for the auto and steel sectors had been drawn up, Premier Wen Jiabao said at the beginning of the month.

The performance of the industry would be affected by when and how the government would support the sector, CAAM deputy director Dong Yang told Xinhua on Monday.

Dong expected both sales and output to grow by about 5 percent in 2009.

It is speculated that the plan would include cuts on car purchase taxes and incentives for the development of low-emission and clean energy-powered cars.

As an emerging market, China's auto market had huge potential, said Zhao Ying, a researcher with the Institute of Industrial Economics of the Chinese Academy of Social Sciences, and the plan would boost sales in 2009.

China's GDP slowed to 9 percent in the first three quarters last year, down sharply from 10.4 percent in the first half of 2008 and 11.9 percent for 2007.