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Car market remains in downturn in 2015,NEVs to boom next year

Source: China Business Journal | Date: Nov. 30

  • For carmakers and consumers, as thedownturn of the car market in 2015 has been irreversible, the growth trend in2016 is the focus of their attention. The market trend for next year willdetermine carmakers’ investment arrangement, production plans, marketingstrategies, sales channel development as well as consumption preferences andtrends.

  • In 2015, the government implemented thepurchase tax cut and exemption policy for small-displacement vehicles. Thispolicy is unlikely to have any impact on the market next year, since it ismerely a means by the government to adjust the structure of the car industry.Rather, it is the new energy car sector that receives the most support from thegovernment.

  • Consumption in the car market has been onthe downward trend, as the market has become increasingly saturated withdeclining demand. Even the SUV segment could not maintain its strong momentumin the long term.

  • Another factor in the sluggish growth ofthe car market is the serious traffic congestion and shortage of parking lotsin cities and local areas. On top of that, public transport has been improving,thanks to the convenient, diverse modes of transportation introduced byinternet companies. This also dampens consumers’ desire to buy cars.

  • In contrast to the sluggish growth offuel-powered vehicles, new energy cars will see stronger growth in 2016, thanksto the increasing size of the market and the introduction of more supportivepolicies. Moreover, the improvement of charging facilities, the mass adoptionof new energy vehicles, and China’s stringent fuel consumption policy willencourage people to buy new energy cars and prompt carmakers to lean theirresources towards the development of these vehicles.