Here comes the worst situation in Chinese passenger vehicle market for 15 years

Chinese passenger vehicle reported a rather low sales growth rate of 5.2% in the first half of the year, decreasing 7.2 percentage points from the previous year, indicating the most terrible situation in 15 years.

In the past 15 years, only three years reported less than 10% sales growths rate namely 2008, 2011 and 2012. The 5.2% growth of the first year has gone beyond the normal range of 100% to 150% of the growth of GDP, which is 7%-10%. According to analyses of insiders, the biggest contribution is the slow pace of the Chinese macro economy.

The growth rate of the GDP last year was 7.3% to 7.4%, while that of the first and second quarter of the year were 7% or even less. The low GDP growth rate can contribute to low amount of the domestic income, which will directly discourage the consumer confidence.

On the other hand, dealers have been discouraged by money loss when they are faced with high inventory and official price cutting, which also contributed partly to the low sales.