China sales projected to fall 10% this year

(Bloomberg) -- China's auto sales may fall 10 percent this year with the end of government stimulus policies and restrictions on car licenses, according to the China Automotive Technology & Research Center.Industrywide vehicle deliveries fell for the first time in 27 months in April as the government raised fuel prices, cities implemented controls to curb traffic and Japan's March 11 earthquake slowed vehicle production.Total sales of cars, commercial vehicles and heavy trucks declined 0.25 percent to 1.6 million units last month, according to the China Association of Automobile Manufacturers."The exit of government stimulus policies was abrupt, judging from the current effects," said Zhao Hang, president of the center, which helps the government in forming auto industry standards and policy research."The slowdown of auto sales in the first four months was due to the phaseout of government stimulus policies and measures to tackle traffic jams," he said in an interview in Beijing.Zhao's prediction of declining sales contrasts with a forecast for growth to trail the nation's gross domestic product by the manufacturers association. The government's official target is for 8 percent economic growth this year.State subsidies and buying incentives aimed at boosting consumer demand in the wake of the 2008 global recession helped China overtake the United States as the world's largest vehicle market in 2009.China's domestic automakers will be affected more by the slowdown, since their products are aimed at mid- to low-end market segments, Zhao said. He declined to say what measures should be taken to reverse a decline.The government may release a development plan for electric cars and plug-in vehicles soon, he said, without elaborating.

China sales projected to fall 10% this year

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