Recently, an official body of China’s auto industry issued a warning to automakers, urging them to be cautious about potential overproduction and to carefully develop their expansion plans, as People’s Daily reports.
The first quarter of 2010 saw average monthly automotive sales in China exceed 1.5 million units, according to data released by the Chinese Association of Auto Manufacturers (CAAM). The figure that can be translated into a 50 percent increase as compared to the one posted last year.
However, the small vehicle incentives have been reduced for the current year, a measure that will reduce purchasing power. One of the signs that the market growth will slow down is the fact that the 1.6 liter & smaller engines segment of the market that boomed last year posted a decrease last month.
In addition to that, the country’s automotive sales posted a quarterly increase of less than 16 percent, indicating that the surge is stating to fade as the market is returning to a “normal” pace.
The country’s automakers are currently on top of the situation, with their stocks situated at a decent level, so they should just continue to be cautious.
"The automakers should be prepared of market fluctuations," Dong Yang, vice president of CAAM was quoted as saying by the aforementioned source. "Automakers' current inventories are around one-third of their monthly sales, generally at a reasonable level."
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