October auto sales sluggish as domestic brands falter

Volkswagen, GM jostle for top place

China's auto market remained sluggish in October, with sales growing only 2.82 percent year-on-year, and the annual growth may miss the 8-10 percent forecast made by an industry association at the beginning of 2014.

China sold a total of some 1.99 million vehicles in October, according to data from the China Association of Automobile Manufactures (CAAM) on Friday. In the first 10 months, total auto sales reached 18.99 million units, up 6.58 percent on a yearly basis but much slower than the 13.9 percent rate in 2013.

CAAM's secretary-general Dong Yang said at a press conference in Beijing on Friday that the declining growth is mainly attributed to the overall economic slowdown.

"But that [slower growth] doesn't mean that China's auto market is saturated … It is still likely to grow at 8-12 percent for the next decade," Dong said, pointing out that the country's car ownership is still well below the global average.

Sales of passenger cars, including sedans, SUVs and MPVs, have grown at a faster pace in the first 10 months. China sold 15.86 million units of passenger cars during the period, up 9.76 percent over the same period last year, CAAM said.

The market share of China's homegrown passenger car brands has seen a rebound during the past three months, with 39.54 percent share in October, 1 percentage point higher compared with that in September. However, the share is still 1.15 percentage points lower than the same period in 2013.

In January-October, the market share of domestic brands was 37.81 percent, down 2.28 percentage points year-on-year. German automakers accounted for 21.06 percent in the segment, followed by Japanese carmakers with 15.21 percent and US carmakers 12.84 percent, CAAM data showed.

Though China's homegrown brands still accounted for the largest share in the overall passenger car market, they are facing greater competition from foreign brands, especially in the sedan segment, analysts said.

"China's homegrown auto brands are still facing many challenges and their sales may continue to see year-on-year drops for a period," said Wu Shuocheng, a senior analyst at industry consultancy Menutor Consulting Shanghai Co, noting that the rebound may be temporary.

German automaker Volkswagen and US' General Motors (GM) have been competing for the top spot in China's auto market. The Volkswagen brand reported sales of some 2.3 million units in the January-October period and GM sold 2.87 million units during the same time.

In the sedan segment, Volkswagen's two joint ventures in China, FAW-Volkswagen and Shanghai Volkswagen, took the top two sales spots in the first 10 months, and GM's joint venture Shanghai GM ranked third.