China March 2014: Growth slows to 8% – 24 million annual rate

Is it the end of explosive growth in China? Not so fast…

Before going through March brands and models detailed data in the next couple of days, a little taste of things to come in China: according to the state- backed China Association of Automobile Manufacturers, sales of Passenger Cars in China gained 7.9% year-on-year in March to 1.7 million units, a much slower growth rate than February (+18%) but higher than January (+6%). Including buses and trucks, the March monthly total is up 6.6% to 2.2 million units, bringing the First Quarter score to a record 5.9 million sales, up 9.2% on 2013. This means if this growth rate is maintained throughout the year we still are looking at an incredible 24 million units for the Full Year 2014 vs. 21.98 in 2013! Read also: China: Light-vehicle market to reach 30 million by 2020.

Tianjin could be the next Chinese city to limit new license plates, prompting panic sales.

One week before the Beijing Auto Show opens, the big topic at the moment in China is the concern among car dealers that more cities may start limiting new license plates, and this is now affecting new car sales but in a positive way. According to Automotive News China, last year the CAAM identified 8 cities that may impose car purchase restrictions. Two of the cities – Hangzhou and Tianjin – have already introduced such measures since, and consumers placed orders for 70,000 vehicles in Hangzhou on the day that the eastern city imposed quotas on new license plates. The CAAM estimates that panic purchases may boost sales by 500,000 units this year.

Zotye is one of a handful of Chinese manufacturers to still grow extravagantly this year (+45%).

In March, General Motors outsold Volkswagen AG for the first time in 4 quarters, gaining 13% to 919,114 vehicles year-to-date vs. 880,700 by Volkswagen (+14%). regaining the lead among foreign carmakers in China. Ford gains 45% to 271,321 units and is catching up on Nissan and Hyundai after passing Toyota for the first time in 2013. Chinese carmakers’ market share at home is in decline for the 7th consecutive month to 39.3%. According to CAAM Secretary General Dong Yan, “the time for local brands to engage in hand-to-hand combat with foreign brands has really started and the outlook isn’t optimistic.” Read also China: How local brands may finally find their mojo at home.