China May not Meet Car Sales Target This Year

   Date:2012-03-09

CHINA'S industry minister said the nation's car sales may fail to meet this year's growth forecast as the slowing economy discourages consumers from dealerships in the world's largest vehicle market.

Automakers will find "big difficulties" delivering as many cars as the China Association of Automobile Manufacturers projected for this year, Minister of Industry and Information Technology Miao Wei told reporters in Beijing yesterday. The state-backed auto association in January predicted passenger-vehicle sales would rise 9.5 percent in 2012.

A slowing economy and record gasoline prices probably led car sales to fall an estimated 3 percent during the first two months of 2012, the worst start in seven years, according to a Bloomberg News survey of analysts. Worse-than-expected deliveries would be a further blow to global carmakers such as General Motors and Volkswagen as they brace for falling demand in Europe.

The government should take measures to help support domestic automakers because of the state is obliged to help any industry where the homegrown companies are early in their development cycle, Miao said.

China is set to announce its alternative-energy vehicle plan after all the relevant ministries involved in drafting the proposal reached a consensus on development of such vehicles, he said.

Total auto sales, including those of commercial vehicles, will probably accelerate to 8 percent in China this year after slowing to 2.5 percent in 2011, according to CAAM.

Separately, Li Yizhong, China's former industry minister, said the government will focus its efforts on developing the electric-car industry over hybrids and other fuel-efficient vehicles. The plan will be announced after approval from the State Council, he said.

"Everyone has come to the conclusion that electric vehicles will be the way forward for new-energy vehicles and China's automobile industry," Li said on the sidelines of the National People's Congress meetings.

Electric-car sales in China, the world's largest polluter, are forecast to exceed those in the US by 2020 as Chinese consumers are more receptive to the technology than their US and European counterparts, according to the Boston Consulting Group in a report.

China needs to raise technology levels for auto assemblers and companies that make batteries for electric cars, he said. That, coupled with the installation of charging stations, will bring down the costs of such vehicles, Li said.

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