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Growth in vehicle sales in China in 2011 lagged behind growth in US auto sales for the first time in at least 14 years.
Growth in vehicle sales in China in 2011 lagged behind growth in US auto sales for the first time in at least 14 years, Bloomberg Businessweek reported.
Total vehicle sales, which include cars, trucks and buses, rose only 2.5 percent, according to data released by the China Association of Automobile Manufacturers today, Bloomberg Businessweek reported. Meanwhile, US vehicle sales increased 10 percent, the Associated Press reported.
Auto manufacturers still sold millions more vehicles in China than in the US, delivering 18.5 million vehicles to Chinese buyers in 2011 while US sales were 12.8 million, the AP reported. China became the biggest market in the world by number of new vehicles sold in 2009, according to the AP.
According to the Financial Times:
Most Chinese auto analysts believe the main reason for the slowdown was the withdrawal of tax incentives introduced by Beijing as part of a 2008 economic stimulus package, which helped boost total vehicle sales 46 per cent in 2009 and 32 per cent in 2010. Those incentives, for small engine cars and mini commercial vehicles, were withdrawn completely last year.
Higher interest rates and restrictions on new vehicles in Beijing also kept Chinese consumers from buying cars, Bloomberg Businessweek reported.
“This data was what we expected,” said Jia Xinguang, managing director of the China Automobile Dealers Association, told the AP.
While analysts don’t expect a return to the rapid growth of 2009 and 2010 this year, they said they expect the Chinese market to continue expanding, the Financial Times reported. Bill Russo, head of Synergistics auto consultancy in Beijing and former head of Chrysler in China, told the Financial Times that he expects vehicle sales in China to reach 20 million in 2012. “Continued growth of the urban middle class, along with continued investment in China’s transportation infrastructure, will continue to fuel demand growth for the foreseeable future,” he said.
The average estimate of 10 analysts surveyed by Bloomberg is that the US auto market will grow 5.6 percent this year to 13.5 million, Bloomberg Businessweek reported.
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