(Yicai Global) March 9 -- China's car sales are unlikely to increase this year amid pressure from structural adjustment and policy changes, and a like-for-like annual growth would be a good result for the sector in 2018, says an industry body report.
Players in China's auto market are pessimistic about prospects this year, China Automobile Dealers Association said in a report, adding that high inventory levels seen in February indicate lower demand among consumers.
CADA's inventory warning index reading for last month was 52.3, down 14.9 percentage points lower than January but still relatively high. February is traditionally a low-sales month due to the Chinese New Year holiday period.
China recently ended a policy allowing purchase tax discounts for low-emission vehicles, and the tax rate increased to an initial 10 percent from 7.5 percent, contributing to a downturn in demand for vehicles. The government's decision to remove restrictions on the transfer of second-hand vehicles across different regions will also adversely affect demand for new cars.
Countries typically conduct an in-depth revision to automobile sales goals in the eighth to tenth year following the wide popularization of cars, CADA said, and China is currently going through that revision.