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Chinese Auto Market Cooling, But Still at 17 Million

Inventories high, dealer confidence low for the balance of 2010.

by on Jul.21, 2010

China claimed the global sales crown for 2009 and will likely retain it for years, if not forever.

The Economic Monitoring Center of China National Bureau of Statistics and Sinotrust International Information & Consulting today said that even though the Chinese market was growing at a record 18-million unit rate for the first half of 2010, it can’t be sustained for the balance of the year.

Dealers are not optimistic about for the second half of the year, traditionally a slack sales period, and inventories have grown.

Still, record annual sales of 17 million are expected, a 25% increase from 2009.

There is an ongoing debate in China concerning what is a sustainable rate of growth in what is now by far the world’s largest auto market.

According to the survey conducted with automakers and dealers, the “cooling off” was caused by declining sales closing rates and the pressure from the increasing inventory.

Although still optimistic, most automakers are now cautious in making predictions the size of the market in the third quarter.