Auto sales set to slow as demand dips amid downturn

China's automobile industry may not be able to sustain its growth momentum in the next four months, even though data released by an industry association indicated healthy growth in the first eight months, analysts said Tuesday.

China's auto sales amounted to 12.5 million units in the first eight months, a year-on-year growth of 4.1 percent, the China Association of Automobile Manufacturers (CAAM) said Monday.

In August, vehicle sales reached 1.5 million units, an increase of 8.4 percent month-on-month, compared to 1.4 million in July, which was 12.6 percent lower from June, according to the CAAM.

However, Su Hui, deputy director of the auto market division at the China Automobile Dealers Association, said that the industry will not be able to maintain steady year-on-year growth in sales in the next four months amid economic slowdown and sluggish demand.

"Domestic oil prices have been hiked following an increase in international oil prices, making most consumers think twice before purchasing cars," Su told the Global Times Tuesday.

Moreover, a lack of favorable policies also diminished consumers' motivation for car purchase, Cui Dongshu, deputy secretary-general of the China Passenger Car Association (CPCA), told the Global Times.

The government mainly subsidizes the purchase of new energy vehicles, which is not enough to attract Chinese consumers due to the inconvenience of running these vehicles, such as the lack of charging facilities, Cui said. "The consumers always have a strong demand for oil-powered cars."

Starting from June 1, 2010, China began to give a subsidy of 3,000 yuan ($473.4) to consumers who buy energy-saving vehicles.

Sales of energy-saving vehicles stood at 8,568 units in 2011, according to data released by the CAAM on January 12.

The CAAM also noted that the market share of self-owned brands of passenger vehicles further declined in August.

"Self-owned brands only accounted for 20 percent of the market in August, but their share is expected to jump to 27 or 28 percent in October due to their potential for exports," said Cui from the CPCA.