China's auto sales growth is set to slow to 3 percent next year

China's auto sales growth is set to slow to 3 percent next year, according to data from the China Association of Automobile Manufacturers.

"Total sales are set to rise 3 percent to 29.8 million units in 2018. China's passenger car sales are expected to add 3 percent to 25.5 million units and commercial vehicles will climb 2 percent to 4.3 million units next year, " said Xu Haidong, a spokesman of CAAM during a conference.

Data from CAAM showed that in the first 11 months, China's auto sales rose 3.6 percent annually to 25.8 million units.

But that growth rate is below CAAM's estimate of 5 percent growth for 2017. Last year's auto sales surged 13.7 percent.

Xu Qian, China head of automotive practice at AlixPartners, attributed the slower growth to the "increase in purchase tax in 2018" and "we don't expect the sales growth next year to outperform this year."

The purchase tax for vehicles with engines below 1.6 liters will be raised from 7.5 percent this year to 10 percent at the beginning of next year, the Ministry of Finance said.

David Zhang, an independent automotive consultant, said that the growth of the automobile industry "will be affected by GDP and overall economic growth. Vehicle demand will be depressed by the slower economy."

He also cited the popularity of car-sharing and ride-hailing as factors affecting the growth in auto sales.

An auto industry report published by WAYS Consulting Co said that ride-hailing and car-sharing is rising in China. "These mobility services also inhibit consumers' willingness to buy cars. In the long run, it will have a negative impact on consumers' intention to purchase a passenger car," the report said.