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China Car Market Faces Second Half Decline

China Car Market Faces Second Half Decline

Source: JustAuto

Although the Chinese car market appears to have begun the year brightly, it faces decline later in the year as the annual year-on-year comparison will be against bumper sales achieved in the latter part of 2016, according to LMC Automotive.

As a consequence, LMC forecasts the full-year 2017 annual growth rate of vehicle sales in China will reach no more than 2%, less optimistic than local trade association CAAM's 5%, after the country saw growth of 13.7% to around 28m sales in 2016.

A total of 3.9m passenger cars were sold in the first two months of 2017, breaking the bimonthly sales record of 3.6m units in the same period last year for year-on-year growth of 6.3%, according to data released by CAAM.

Analysts look at the combined sales volume of the first two months of the year, as the lunar new year holidays fell in January this year, but in February last year.

LMC analyst John Zeng notes that the comparison with sales in 2016 will make growth more difficult as the year progresses.

"Only if the first half resulted in 4 to 5 percent growth would the annual rate touch 2 percent," he says. "It's unlikely to see growth in the second half, as the sales achieved a sky-high record in the last several months last year."

Zeng told the China Daily that 2% annual growth based on China's tremendous market size would be exceptional growth, and said that 5% would be "huge".

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