Chinese automakers association slashes 2015 forecast for vehicle sales growth to 3%

The Chinese automakers association has slashed its 2015 forecast for vehicle sales growth to a meagre 3 per cent today as a major slump in the country's stock market led to depressed sales to consumers concerned about economic prospects.

The China Association of Automobile Manufacturers (CAAM) had earlier projected growth of combined sales of passenger and commercial vehicles at 7 per cent to 25.1 million this year, as against 6.9 per cent in 2014.

However, auto sales for the first half of 2015 grew at the slowest pace in at least six years as a stock market added to a list of problems for automakers.

The industry recorded the lowest year-on-year sales increase at 1.4 per cent since 2009 according to a Reuters review of monthly CAAM releases available from late 2008 onward.

The body said today at a news briefing in Beijing that auto sales in China were down 2.3 per cent in June from a year earlier to 1.8 million vehicles, the third consecutive monthly decline.

"The stock market has some impact on car sales as it hurts cash flow and less people visited 4S (dealership) stores," CAAM chief Dong Yang told reporters.

Dong said he remained confident of sales picking up in the second half.

In the first half of this year, sales of passenger vehicles increased 4.8 per cent to 10 million units from the year-earlier period, according to the auto manufacturer group.

Sales of total automobiles including both passenger and commercial vehicles stood at 11.85 million units.

"2015 will be an off-year for the Chinese car market," said Dong. He added, slowdown was due to a confluence of factors including the cooling economy, increasing restrictions on car ownership to combat congestion and pollution and stock market volatility.

"Neither a bull market nor bear market does good to car sales. Our surveys of dealers show that visiting volumes to car showrooms dropped sharply in the first-half," Dong said.

Most car makers had reported slower sales gains for the first half of this year with General Motors Co reporting a 4.4 per cent rise in its China sales, down from a 10.5 per cent increase in the year-earlier period.

Sales growth at Toyota Motor Corp dipped slightly to 10 per cent from 12 per cent over the same period.