Data released by China Association of Automobile Manufacturers recently show that from January to September, the production and sales volume of vehicle in China was 7.3131 million sets and 7.2292 million sets respectively, increasing by 12.35 percent and 11.94 percent year on year. China has been maintaining an increase rate higher than 20 percent for nearly ten consecutive years, which slides to a dozen percent this year. At the same time, the production and sales growth is continuing slowing down; China's auto market is registering a characteristic of entering into a new round of adjustment.

Relatively gentle increase

Statistic data from China Association of Auto Manufacturers indicates that in the first quarter, both the production and sales volume of vehicles exceeded 2.5 million sets, in which the sales volume grew by 21.42 percent year on year. The passenger vehicle market is stable on the whole, with the sales volume amounting to 1.8511 million sets and increasing by 20.41 percent year on year. The sales volume of commercial vehicle was 0.7267 million sets, rising by 24.06 percent than the same period of last year. The auto market at the beginning of 2008 has as it were an encouraging start.

When the first half of 2008 passed, the accumulative production and sales volume of vehicle both exceeded 5 million, climbing by 16.71 percent and 18.52 percent respectively. CAAM commented, "The increase slowed down gently than the same period of last year. But as far as the growth of the first half year is concerned, it still maintained a high speed". The "gently slow down" mentioned in the comments was mainly manifested by the growth rate of production and sales volume in the first half year, which was 5.65 percent and 4.78 percent lower respectively year on year. In which the growth of passenger vehicle production and sales volume was 4.89 percent and 5.19 percent lower than the same period of last year.

But in the third quarter, the auto market saw an obvious decline in July and August and rallied in September. In July, the production and sales of vehicle appeared month-to-month decrease for the first time, the production and sales volume was 0.732 million and 0.6658 million sets respectively, down by 12.57 percent and 20.43 percent month-to-month and up by 11.13 percent and 3.88 percent year on year. In August, both the production and sales showed year on year decrease for the first time, the production and sales volume was 0.6155 million and 0.629 million respectively, declining by 3.5 percent and 6.34 percent year on year. In September, the vehicle production volume was 0.7647 million, increasing by 24.24 percent month to month and 1.02 percent year on year; the sales volume was 0.7515 percent, increasing by 19.48 percent month to month and declining by 2.74 percent year on year.

From January to September, the production and sales volume of vehicle was 7.3131 million and 7.2292 million sets respectively, increasing by 12.35 percent and 11.94 percent year on year. The production volume of passenger vehicle was 5.188 million and 5.1032 million sets separately, going up by 12.29 percent and 11.36 percent year on year; the production and sales volume of commercial vehicle was 2.1252 million and 2.126 million sets separately, growing by 12.48 percent and 13.35 percent year on year.

We can see from the statistic data of the first three quarters that domestic auto industry has been confronted with lots of difficulties this year. It is very difficult to keep a 20 percent higher increase rate of production and sales volume. According to the production and sales volume curve of the first nine months, experts predict that domestic auto market will maintain a relatively moderate growth in the future.

Mid-term and long term market is positive

Although domestic auto market met lots of troubles this year and insiders predict such difficulties will go on existing next year and in a period in future, lots of ordinary consumers still have vehicle purchase demand, according to the reporter. The newly built small families want to buy a new car, and lots of families in big cities need new cars, and so on, the demand is active even only considering private purchase. During the National Day Holiday, Beijing Sinotrust Marketing Research & Consulting Ltd. and Beijing Yayuncun Automobile Trade Market jointly conducted a consumer investigation, which indicates that 48 percent of interviewees planed to buy cars in three months and they were quite enthusiastic to auto products. Except for private purchase, enterprise purchase and public construction purchase such as capital construction are considered by experts as the important points of need in China.

 "The mid term and long term trend of China's auto market remains unchanged." Xu Changming, Director of the Economic Forecast Department of the State Information Center reckons that analyzing from the laws of development of international auto market; China's auto market is in a relatively well-developing stage. According to the development of international auto market, the vehicles per thousand people needs ten years to increase from 20 to 100 and the sales volume increase is around 20 percent per year. China's vehicles per thousand people are around 22 sets this year and begin to come into the interval between 20 and 100. Though each country has its own situation and has different increase rate during the stage, the mid term and long term growth trend still could be predicted. Conferees like Luo Lei, Vice Secretary-General of China Automobile Dealers Association and Su Hui, General Manager of Beijing North Star Yayuncun Automobile Market Center consider that the growth trend of domestic market is still positive so long as the market has the demand.

Auto market faces new opportunities

The difficulties of auto market make lots of manufacturers and distributors lower their anticipation of next year. Most insiders hold a cautious view toward auto market in 2009. However, China's auto market is up against lots of new opportunities under such a difficult-looking development trend. 

Since the reform and opening up to the outside world, China's auto industry obtained a speedy development. Especially in recent dozen years, vehicle and relevant enterprises have developed to the full along with the thriving market. Although the quantity is increased, the quality of enterprises is irregular. The difficult situation of auto market will probably continue for a period next year. But this is just the chance to restructure and integrate the industry by means of the force of market. After the test of such a process, the internal competency of China's auto industry and the developing level of the whole industry will be improved.

In the statistic data of passenger vehicle in the first three quarters, in spite of the influence of the negative factors, some brands still had a conspicuous sales performance, such as Accord of Guangzhou Honda and F0 of BYD (F0 is newly coming into the market). Han Lei, Vice Secretary-General of Society of Automobile Engineering of China, said that the "internal strength" of enterprises could be better manifested when confronting with difficult circumstances. In his view, the current market environment could make enterprises pay more attention to market research and position their products accurately in the market, this is particularly important for independent brands that are fighting in overseas market.