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Handbrake on Chinese vehicle sales

Top effort: Great Wall’s Haval H6 was the top-selling SUV in China in 2014.

China’s car rush slows, leaving angry dealers holding excess stocks

19 Jan 2015

AFTER years of manic automotive sales growth in China, the world’s biggest motor market has slipped into cruise mode, recording a mere seven per cent sales increase last year with more of the same forecast for 2015.

Chinese car dealers are reportedly awash with stock due to the slow-down in an industry geared to ever-soaring sales, and while no one is predicting a meltdown, dealer groups are demanding action by manufacturers to curb supplies and help pay for incentives to shift unwanted cars.

According to the China Association of Automobile Manufacturers (CAAM), the Chinese motor industry sold a record 23.5 million vehicles last year, up 6.9 per cent on 2013’s tally when growth was 13.9 per cent.

The problem is that vehicle manufacturing volumes outstripped sales, rising 7.3 per cent to 23.7 million vehicles. To compound the issue, exports fell 6.9 per cent and imports rose 20.7 per cent.

Nevertheless, it was the sixth straight year that China has taken the crown as the world’s largest auto market, continuing an unbroken period of growth that topped out at 32 per cent in 2010.

Last year, the market was again dominated by Volkswagen and General Motors and their Chinese joint venture partners, with VW Group – including Audi and Porsche – again shading the American company, 3.67 million to 3.53 million.

Both of these automotive juggernauts out-performed the market, with sales rising about 12 per cent for each.

Luxury car sales growth was significant, with VW’s Porsche and Audi volumes rising 25.4 per cent and 17.7 per cent respectively, and GM’s Cadillac premium arm enjoying a 47 per cent sale increase.

With more large Chinese cities restricting the sales of fossil-fuelled vehicles, sales of alternative-powered cars such as battery electric vehicles continue to rise, up 324 per cent to 75,000 units.

Shenzhen is the latest city to restrict sales, joining the likes of Beijing, Shanghai, Tianjin, Guangzhou and Guiyang to end unfettered access to motor vehicles.

The Chinese central government has also pledged action to take five million of the worst polluting vehicles off the road this year.

In 2014, foreign-branded vehicles continued to dominate passenger car sales, with three VW-badged products – Lavida, Sagitar and Jetta – in the top four.

GM’s top performer was the Buick Excelle at number five, with the Chevrolet Cruze at number seven.

In the SUV market, Great Wall’s Haval H6 topped the sales charts by a massive margin over VW’s Tiguan, 315,881 to 237,404.

Thanks to its SUV sales, Great Wall was ranked the highest independent Chinese manufacturer, at 11th, with Chery sitting 14th and Geely 16th.

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