China 2015 auto sales growth hits 3-year low

Vehicle sales in China, the world's largest car market, increased at their slowest pace in three years in 2015, industry group data showed Tuesday, as slowing growth and volatile stock markets hit demand.

A total of 24.60 million cars were sold last year, up 4.7 percent from 2014, according to the China Association of Automobile Manufacturers (CAAM).

That was down from a 6.9 percent rise in 2014 and marked the slowest growth since 2012 when sales increased by 4.3 percent, previous CAAM figures showed.

CAAM secretary general Dong Yang estimated that purchase restrictions imposed in big cities pulled auto sales growth down by up to eight percentage points, while extraordinary swings in the country's stock markets were responsible for a two percentage point drop.

"The 2015 car market downturn was to some extent accidental," Dong wrote in an article on CAAM's website.

Looking forward, "those factors should improve clearly and the auto market will not grow as slowly as in 2015", he added.

Sales may gain around six percent this year to top 26 million units, CAAM said Tuesday, according to Bloomberg News.

The market is crucial to foreign auto makers, some of whom posted strong sales last year despite the overall slowdown in growth.

US auto giant General Motors delivered a record 3.61 million vehicles in China in 2015, up 5.2 percent from the previous high in 2014, according to the company, China's top foreign auto maker by sales.

The numbers put it ahead of German rival Volkswagen, which is struggling with a global scandal over emissions cheating.

Volkswagen China delivered 3.55 million vehicles to customers in the Chinese mainland as well as Hong Kong, it said on Monday.

Ford, another US car maker, set a record for sales in China in 2015, reaching 1.12 million vehicles, up three percent on the previous year, the company said.

China's auto industry felt the pinch of the country's slowing economic growth last year, with producers scaling back output and media reports of unusually long holidays at factories and decreased bonuses and overtime pay for workers.

Economic growth hit a 24-year low of 7.3 percent in 2014 and slowed further last year, weakening to 6.9 percent in the July-September period.

A spectacular rally in Chinese shares in the first half of 2015 attracted huge flows of funds into the stock markets, much of which became locked up in an ensuing rout, hitting consumers' budgets and dampening demand for cars.

To prop up the auto industry, the government cut purchase taxes by half on cars with small engines from October 1.