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Double-digit growth forecast

By Li Fusheng (China Daily) Updated: 2016-10-24 10:27

Double-digit growth forecast

Visitors crowd around exhibitors at the China Auto Show on May 3 in Beijing. [Photo by Zhang Haiyan/For China Daily]

Significant jump in sales heralds success in passenger car market

China's passenger car sales are expected to see double-digit growth this year, said a senior expert at the National Information Center on Thursday.

Liu Ming, director of the center's auto industry information section, said sales in the third quarter were "unexpectedly high", laying a solid foundation for this year's overall growth rate, which he expects to stand between 10 and 14 percent year-on-year.

Statistics from the center show that a total of 5.4 million passenger cars were sold in the third quarter, soaring 27.9 percent from the same period last year.

"That is the highest growth rate in the past 25 quarters," said Liu at a regular press conference at the Beijing Asian Games Village Auto Trade Market Center.

The performance has brought total sales to 15.59 million units by the end of September, a 15.8 percent growth year-on-year.

Liu said China's favorable policy for cars with engines no larger than 1.6 liters has been one of the major driving forces of sales.

Starting from October 2015, customers who buy such cars are entitled to a 50 percent discount on the purchase tax, which usually stands at around 10 percent of a car's sticker price.

Statistics show that in the first three quarters of 2016 sales of such cars accounted for nearly 67 percent of the total. The figure was less than 63 percent in 2015.

The China Association of Automobile Manufacturers also believes the policy has played a role in boosting car sales.

In an earlier interview, Shi Jianhua, the organization's deputy secretary-general, said the association will lobby the State Council, China's cabinet, to extend the policy if necessary, as it is due to expire by the end of December.

Liu expects that car sales in the fourth quarter could hit a new high of 6.7 million units, which would represent 10 percent growth year-on-year, as people may rush to seize their last chance.

Besides, the Spring Festival will fall in January and as always people will go to buy things before this most important Chinese holiday.

Liu said the performance of China's automotive market so far has shown that there is still huge potential for passenger cars in the coming years.

But he warns that the SUV market, which has been fueling car sales for the past two years, is gradually losing steam.

Statistics from the center show that the share of SUVs in car sales has remained basically the same in the past three quarters: 40 percent, 40 percent and 41 percent.

The figure stood at 26.7 percent in 2014 and jumped to 34.8 percent in 2015.

Meanwhile, Chinese brands are seizing a growing share in the market: 33.3 percent by the end of the third quarter, nearly 3 percentage points higher than by the end of 2015.

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