The Chinese market reached 23 mio units sold in 2016 and accounted for around 30% of global passenger car sales, which makes China the largest car market by far. The automotive industry is considered one of the main pillars of the Chinese economy and the government continues to regulate and control it in various ways.
China has remained the world’s largest automotive market and automotive manufacturing country since 2009. There was a compound annual growth rate (CAGR) of 18,1% from 2005 to 2012.
In 2016, the official China Association of Automobile Manufacturers (CAAM)reported that China’s auto industry enjoyed rapid growth, with its sales and production both hitting new records. The production and sales of automobiles (passenger & commercial vehicles) were 28,119.000 and 28,028,000 units respectively, up 14.5% and 13.7% year on year, 11,2% and 9.0% higher than in 2015.
The automotive sales market will likely climb 5% in 2017 to 29.4 million vehicles, still triggered by a tax cut policy starting in 2015. The sales tax on cars with engines of 1.6 liters or below was cut to 5% (from 10%) in late 2015, giving the auto industry a much-needed boost as the economy slowed. The tax is set to rise again to 7,5% for 2017, before returning to 10% in 2018.
After strong growth for nearly a decade (CAGR of 18,1%), the Chinese automotive market is reaching a critical point in its development. Growth has shifted to a more modest rate, also referred to as “new normal” also assumed for most of the targeted industries in the latest version of the 5-Year Plan (13th).
Importantly, China’s 13th five-year plan (2016 – 2020) begins while Beijing is experiencing its slowest growth in decades, while at the same time China grapples with reforming and rebalancing many facets of its command-based economy.
(The article content from the Internet)