Car sales in China are slowing down as the economy is sharking according to the China Association of Automobile Manufactures (CAAM)’s report Wednesday.
Although the month of March had a modest 4.5 percent increase compared to the same month last year, the number of units sold in the entire first quarter of 2012 decreased by 1.3 percent. Some of the suggested reasons for the decline include less working hours during the Chinese New Year holidays, slowing economy, and increasing gas price.
“March was never a very good month for car sales,” said Sheng Ye, associate research director for Greater China at industry consultancy Ipsos.
“Now that the government cut the GDP target and raised fuel prices, you can imagine the psychological impact that could have on people who are thinking about buying cars,” Ye said.
A decline in car sales shows a stumble in growth in the bigger economy. According to a Wall Street Journal poll conducted by 15 economists, 8.3 percent median growth is forecasted in China’s gross domestic product for the first quarter of this year. This would indicate the slowest growth since the second quarter of 2009 when the government provided incentives for buying a new car, increasing the Chinese auto market by 46 percent. The incentive has been expired by now.
In contrast to the Chinese car market, the United States, auto sales rose up about 13 percent in March, as the economy is doing better. .
“I wanted to buy a car and I still do, no question about that. But I am not buying it right after the price hike,” commented Liang Li, an English teacher in Shanghai, who has decided to postpone plans to buy a car.
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