The growth of vehicle sales in China showed signs of slowdown in 2011, after posting only a 2.5% hike to 18.5 million units, according to data released by the China Association of Automobile Manufacturers. The percentage figure was slightly lower than 3 percent median forecast of five analysts surveyed by Bloomberg. In 2010, China posted a 32% hike in total deliveries over 2009.
The slowdown in Chinese sales was mainly attributed to the stoppage of a two-year stimulus package that included tax breaks and rebates, making vehicles more expensive. The slowdown was also attributed to higher interest rates and restrictions on new vehicles in Beijing, which discourage purchases of expensive items like vehicles.
“China’s auto sales growth won’t reach anywhere near the past couple of years as it scales back to a more sustainable pace,” Jenny Gu, of LMC Automotive, said. Meanwhile, passenger-car deliveries in China hiked by 5.2% to 14.5 million, down from a 33% growth in 2010. Commercial vehicle sales, however, dropped 6.3% to 4.03 million units. China's growth in vehicles sales was slower than the U.S. for the time in 14 years.