For the first time in nearly a decade and a half, auto sales in the United States grew at a faster pace than in China. Although China remains the world’s largest auto market, the U.S. was able to overtake China in terms of growth in 2011 due to reduced government incentives.
According to the China Association of Automobile Manufacturers, new car sales in the country totaled 18.5 million units last year, representing a modest 2.5 percent gain. Analysts were expecting a 3 percent improvement.
China’s new car market expanded 32 percent in 2010, aided by government incentives. However, those tax breaks have largely expired, and the government has even begun to increase restrictions on vehicle ownership – all factors leading to the slight sales gain.
“China’s auto sales growth won’t reach anywhere near the past couple of years as it scales back to a more sustainable pace,” said Jenny Gu, an analyst at industry researcher LMC Automotive in Shanghai. “The past few years were boosted by government incentives.”
This year is expected to be slightly better for China, with analysts calling for an 8 percent improvement in new car sales.
Sales in the U.S., meanwhile, grew 10 percent to 12.8 million units last year, marking the first time China’s sales growth has lagged the U.S. Since 1998.
References
1.’China’s auto-sales…’ view
