Shanghai, China – Light vehicle sales are projected to decline by nearly two per cent in 2009 to 8.57 million units in China due to the economic slowdown, according to J.D. Power Asia Pacific.

The decline is expected to be more pronounced in the light commercial vehicle market, with sales forecasted to decline by nearly three per cent, to 2.75 million units. Passenger vehicle sales, including cars, MPVs and SUVs, are expected to come in at 5.83 million units, down by one per cent from 2008.

“The once red-hot Chinese economy is slowing markedly due to a pronounced downturn in global demand for its exports,” said Michael Dunne, managing director of J.D. Power Asia Pacific. “The country’s key export sector reported a 17 per cent year-over-year decline in January, compared to an average of 20 per cent growth during the first ten months of 2008. However, compared with other international markets, the new-vehicle market in China is still relatively strong, and it is particularly encouraging that the government is enacting new policies, including those that are favourable toward environmentally-friendly vehicles and smaller vehicles, that will shape sales through 2009.”

Changes in purchase taxes and an increase in fuel taxes are expected to cause a shift toward smaller vehicles. Sales of subcompact cars are projected to increase by two per cent in 2009 when compared to 2008, while sales of larger vehicles, including compact and midsize cars, are expected to decline by three and four per cent respectively.

Despite the decline projected, China is the second-largest automotive market in the world, behind only the United States in the number of units sold annually.

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