China's auto market continues to lose momentum. Auto sales across the country totaled 1.38 million units in May, down 3.98 percent from a year ago, the second consecutive month of decrease, said the China Association of Automobile Manufacturers (CAAM).
The May output came in at 1.35 million units, falling 4.89 percent from a year ago.
Dong Yang, Secretary General of the CAAM, attributed the gloom to the end of policy incentives, new limits on car purchases in Beijing and climbing fuel prices.
In attempts to counter traffic gridlock, Beijing has launched a car-quota system, allowing only 240,000 new cars to be registered in 2011, compared with the 800,000 new automobiles that took to the streets in 2010.
The CAAM in earlier expected the market to grow 15 percent after surging 46 percent and 32.4 percent, respectively in 2009 and 2010.
"It will probably fall short of the forecast if no positive factors emerge," said Dong.
As a pillar of the national economy, the auto industry accounts for 2.5 percent of the GDP, 10 percent of retail sales and 12 percent of job creations, he said.
"The decline is anticipated," said Zhang Xin, an analyst at the Beijing-based Guotai Jun'an Securities Co. Ltd. "After several years of rapid growth, a modest slowdown is healthy for the industry."
Zhang noted that many car buyers had rushed to take advantage of last year's incentives, soaking up much potential demand. |