World's biggest car market expects slowdown

A view of the Bund in Shanghai, China.

January 09 2014 10:33 PM

China's car market -- the biggest in the world -- will see slower growth this year as anti-pollution and austerity campaigns spread, it has been warned.

China, which in 2013 became the first country to see domestic sales surpass 20 million units a year, will see deliveries rise as much as 10pc after last year's 14pc growth, the state-backed China Association of Automobile Manufacturers has said.

While China's motorisation has been a boon for foreign car makers -- all the major ones saw record sales in the country in 2013 -- pressure is building on the government to step in over pollution and as congestion turns roads into car parks.

Sales of luxury goods have been hit since Xi Jinping took over as Communist Party chief in November 2012.

"Vehicle sales in China are facing pressures brought on by environmental protection, traffic jams and more cities limiting purchases," Shi Jianhua, a vice secretary general at the auto association, said in Beijing.

"Demand for imported luxury vehicles will surely decline as the official frugality campaign spreads beyond the government and affects companies and individual consumers."

The increasing number of cars has come at the expense of air quality, leading the nation's industry ministry to warn last month that car sales may slow this year. (Bloomberg)