August 2008 Car Sales In China Fall 6.25% From Last August

SHANGHAI, Sept 8, 2008; Fang Yan writing for Reuters reported that China's passenger car sales fell in August from a year earlier, the first monthly decline in more than two years as a slowing economy and the Beijing Olympics kept would-be car buyers from showrooms.

The world's second-largest auto market sold 451,300 cars last month, down 6.24 percent from year ago, the China Association of Automobile Manufacturers, the country's official industry association, said on Monday.

A few more monthly declines may be in store this year as high fuel prices and a falling stock market dent consumer demand, Rao Da, secretary-general of the China Passenger Car Association, a leading industry group, said in a research report.

Rao also predicted an end to China's era of 20 percent-plus annual growth in passenger cars sales, with 2008 growth falling sharply to 6 to 8 percent, followed by more moderate growth rates of 10 to 15 percent from 2009 to 2015.

China raised gasoline and diesel prices in late June by nearly 20 percent, the first rise in seven months and the steepest one-off hike ever.

That increase and expectations of more in the near future have delayed car purchases, according to a recent online survey by J.D. Power and Internet portal Sina.com. A slump in the stock market, where the benchmark Shanghai Composite Index .SSEC has plunged 65 percent from last October's record peak, has also weakened consumers' buying power.

But Rao noted that the slowdown had simply brought the car market's growth rate into line with the overall economy.

"In the global auto industry, 10 to 15 percent annual sales growth is still very fast," he said.

In the first eight months of the year, 4.55 million sedans, sport utility vehicles and multipurpose vehicles were sold in China, up 13 percent from a year earlier, the country's official auto association said in its monthly report.

Joint ventures of Volkswagen AG and General Motors Corp are the top three car sellers in China.