Car sales in China grows slower

Since the start of this month, Guangzhou, a major city in south China, has begun limiting car sales.

The municipal government is now allowing 120-thousand new cars to be registered per year in a city of about 13 million people in an effort to reduce the pollution and traffic jam. Car manufacturers and retailers, on the other hand, have expressed their concern over the restriction. For more on this issue, my colleague Li Kefu now joins us in the studio.

Q1: Tell us more on the car market in China right now, has it been affected by the purchase restrictions which are now being adopted by more cities?

A: Well, car sales are still on the rise in China, but it's considerably slower than it used to be. According to the China Association of Automobile Manufacturers, overall car sales, including passenger cars and commercial vehicles, grew 2.9 per cent in the first half of the 2012 compared with that of last year. Total sales reached 9.6 million vehicles. CAAM predicts sales in 2012 will grow 5 to 8 percent. China's automobile industry experienced a boom in 2009 and 2010, overtaking the US as the world's largest auto market in terms of sales. But growth became more moderate in 2011 with a slowing economy and the implementations of restrictions on car purchases. CAAM said auto output and sales are not likely to rebound sharply in the short-term, as the Chinese economy still faces downward pressure.