China car sales drop below those of the United States, thanks in part to the 30% plunge in the Chinese Stock market over the past 30 days.
The China Association of Automobile Manufacturers (CAAM) has cut its full-year forecast for vehicle sales growth to 3 percent from 7 percent. As a benchmark, US Auto Sales are expected to grow at 5% this year.
Three percent auto sales growth? For a full year? In China? That is a serious slowdown. It was 6.9 percent in 2014, which was also slower than in previous years.
Implications For The Auto Industry
Does this mean the Chinese have lost their taste for cars? Will China overtake the United States as the world’s leading vehicle market?
The answers to these questions are no and yes. No, the Chinese have not lost their taste for cars. China may be entering into a recession similar to that in the United States in 2008-2009 and in Japan in the 1990s, however. And, yes, China will take over the United States as the world’s leading vehicle market at some point. China has 300 million people in its middle class. That’s nearly the population of the entire United States. Those consumers will resume their car buying zeal in the future. It’s only a matter of time.
For more on this, read: http://www.cnbc.com/2015/07/10/china-stock-worries-hit-auto-sales.html.