Auto sales seen rising 7 percent

China's auto sales are expected to grow this year by 7 percent compared to 2012, but public policies and pollution concerns present some uncertainties for automakers, insiders told the Global Times Sunday.

According to data released Friday by the China Association of Automobile Manufacturers (CAAM), the total sales of vehicles in China will rise by 7 percent this year, having jumped to 19.31 million vehicles in 2012, an increase of 4.3 percent year-on-year.

Although the 2012 growth rate surpassed the increase of 2.45 percent in 2011, which marked the slowest growth in 14 years, the figure was still well below the rise of 46 percent and 32 percent recorded in 2009 and 2010, respectively.

"In 2012, the country's auto sales and production both hit new highs, and the country remained the world's largest auto manufacturer and market for the fourth consecutive year," said a statement from CAAM.

Liu Xin, an economist at the China Economic Monitoring & Analysis Center under the National Bureau of Statistics, wrote in the statement that the auto industry's recent slowdown is expected to end soon.

But considering the high base of comparison, "it is unlikely that (auto sales) could record such fast growth as in 2009 and 2010."

"Public policies to ease traffic congestion may also curb the industry's fast growth, as such policies cool down the market demand for car sales," Jia Xingguang, an executive director at the China Automobile Dealers Association, told the Global Times Sunday, noting that pollution concerns are also putting pressure on the authorities to take measures to control the growth of automobile sales.

Beijing launched a car license plate lottery at the beginning of 2011, as a way to ease the city's traffic jams.

Guangzhou, capital of South China's Guangdong Province, also began to limit the number of car plates in July last year. And Shanghai started the car plate auction in 1994, pushing the price of number plates to new highs every year.

Fu Zhiyong, managing director at Beijing-based consultancy ACME Management Consulting, told the Global Times that Japanese automakers face particular uncertainties in the China market this year.

"As long as the Diaoyu Islands dispute remains unsettled, political issues may still present difficulties for Japanese carmakers," said Fu, while noting that such uncertainty offers a business opportunity for rival firms from other countries, such as Germany, South Korea and the US.

Fu's forecast is based on the 2012 automobile market figures from CAAM. Last year, Japanese brand passenger cars accounted for 16.4 percent of all sales, "a sharp decline," said CAAM. In 2010 and 2011, the figure was 24.3 percent and 23.2 percent respectively.

In comparison, brands from Germany, the US and South Korea accounted for 16.4 percent, 11.7 percent and 8.7 percent of total car sales last year, respectively, all registering an increase from the year before.