How would China auto industry fare in 2009?
In 2008 growth rate of China auto industry had slowed down to a significant extent specially from third quarter onwards. China's economy has been growing weak and there has been lesser demand for cars as of January 2009. All these factors make it clear that China auto industry would find it hard to do well in 2009.
At beginning of 2008 auto makers in China had forecast that they would be able to sell 10 million cars in that year. However, forecasts of auto industry in China have been decreasing at a steady rate since September 2008 when global financial recession kicked off in United States of America.
Chinese Premier, Wen Jiabao has suggested that China automobile industry is at top of national government's priority list and it would be in best interest of Chinese economy if domestic China auto market could be revived.
Economic experts have suggested that proper promotion would be needed in order to revive automobile industry of China. Jia Xinguang who is chief analyst of Beijing Auto Industrial Development Research Center has said that auto industry of China would be facing difficulties in first half of 2009 as a direct consequence of ongoing global financial crisis. During this time buyers of cars in China would be waiting for better deals.
Ji Xinguang said that in second half of 2009 situation of China auto industry would be better as governmental efforts would start to take effect. China auto industry believes that State Council would be taking a number of steps that would ensure a better future for it.
Deductions in sales taxes on cars are supposed to come down in 2009. It is also expected that there would be added incentives that would encourage increased manufacture of automobiles, which are environment friendly. Further consolidation is also supposed to be encouraged within China auto industry. All these factors are supposed to revive automobile industry of China.
It is assumed that in 2009 governmental organizations would be mandated to purchase automobiles made in China when fleet purchases are done. These assumptions has led Geely, a major auto maker of China, to set 300 thousand cars as target in 2009. This is 25 percent more than their target for 2008.