Chinese-brand's passenger vehicle sales declined 4.4 percent in January compared with December last year after 20 months of continuous growth, according to the latest data released by China Association of Automobile Manufactures (CAAM).
In 2016, China's auto market experienced fast growth. The sales of Chinese-brand passenger vehicles reached 10.53 million, up 20.5 percent year-on-year, accounting for 43.2 percent of the total revenue in the Chinese market.
In January 2017, the sales of Chinese-brand passenger vehicles was 977,000, down by 4.4 percent from the same period last year, of which sedan sales was 201,000, a decline of 13.9 percent month-on-month.
CAAM's data shows that in January, production and marketing of new energy automobiles in the Chinese market decreased 69.1 percent and 74.4 percent, respectively; production and marketing of blade electric vehicles (BEV) reduced 63.8 percent and 67.8 percent; those of plug-in hybrid electric vehicles (PHEV) dropped 83.2 percent and 89.5 percent.
However, domestic brand vehicle sales are still expected to grow this year. First, domestic brand cars and enterprises have gained growing competitiveness in recent years. Chinese brands, like Geely, Guangzhou Automobile Group Co. Ltd. (GAC Group), and SAIC Motor, saw their sales increase 60 to 70 percent month-on-month in January.
Second, the government will continue with preferential policies towards domestic auto brands. Although the purchase tax on some small cars has been slashed last year, the preferential policies will continue pushing the sales in China's auto market, especially for domestic brands.
Third, rural area is an emerging market. As Chinese urbanization steps forward, consumer demands for automobiles in counties and villages increases significantly. Domestic brand vehicles have a comparative advantage in terms of improved performance and lower price.