China's auto sales set to grow modest 2 to 3 percent in 2018
Traffic congestion is pictured in Shanghai, China, April 19, 2017.
China's auto sales are set to grow 2 to 3 percent this year amid continuing weak market sentiment, Japanese investment bank Nomura said on Tuesday.
In 2017, China's auto sales rose 3 percent to 28.88 million vehicles from a year ago to notch the slowest market expansion since 2012, according to data from the China Association of Automobile Manufacturers. In 2018, the growth rate of the industry is expected to slow further, Nomura said during its China Investor Forum held in Shanghai on Tuesday.
Benjamin Lo, head of China Auto Research at Nomura International (Hong Kong) Limited, attributed the lackluster industry growth to weak sales of sport-utility vehicles in third-tier and fourth-tier cities in China due to a macro-economic environment as well as car buyers delaying their decision to purchase because of their limited budget.
The slower increase in SUV sales has hit the growth rate of China's auto industry in general.
In the first seven months of this year, sales of SUVs rose 7.3 percent year on year to 5.59 million units but the growth slowed from the double-digit gain one year ago when SUV sales surged 17 percent annually to 5.21 million units, according to the data from China Association of Automobile Manufacturers.
But as SUV sales weakened, the sedan segment grew healthily from a year ago. From January to July, sales of sedans climbed 4.6 percent year on year to 6.5 million units. In the first seven months of 2017, sedan sales shed 2.8 percent.
China's auto sales fell 4 percent in July from a year earlier to 1.89 million vehicles compared with a 4.8 percent rise in June and 9.6 percent growth in May.
