Beijing: Vehicle sales in China, the world's largest car market, increased at their slowest pace in three years in 2015, industry group data showed today, as slowing growth and volatile stock markets hit demand. A total of 24.60 million cars were sold last year, up 4.7 per cent from 2014, according to the China Association of Automobile Manufacturers (CAAM).
That was down from a 6.9 per cent rise in 2014 and marked the slowest growth since 2012 when sales increased by 4.3 per cent, previous CAAM figures showed.
CAAM secretary general Dong Yang estimated that purchase restrictions imposed in big cities pulled auto sales growth down by up to eight percentage points, while extraordinary swings in the country's stock markets were responsible for a two percentage point drop. "The 2015 car market downturn was to some extent accidental," Dong wrote in an article on CAAM's website. Looking forward, "those factors should improve clearly and the auto market will not grow as slowly as in 2015", he added.
Sales may gain around six percent this year to top 26 million units, CAAM said Tuesday, according to Bloomberg News. China's auto industry felt the pinch of the country's slowing economic growth last year, with producers scaling back output and media reports of unusually long holidays at factories and decreased bonuses and overtime pay for workers.
Economic growth hit a 24-year low of 7.3 per cent in 2014 and slowed further last year, weakening to 6.9 per cent in the July-September period. A spectacular rally in Chinese shares in the first half of 2015 attracted huge flows of funds into the stock markets, much of which became locked up in an ensuing rout, hitting consumers' budgets and dampening demand for cars.
To prop up the auto industry, the government cut purchase taxes by half on cars with small engines from October 1.