Growth in car sales to see slowdown in 2011

By Chen Xiaomin in Guangzhou

After seeing brisk market performances in China for the first 11 months, automakers forecasted Monday steady but slower growth paces next year on Media Day of the nation's second largest auto show, which is expected to attract over 480,000 visitors.

The show, the eighth of its kind, will kick off on Tuesday in Guangzhou and last till next Monday. Guangzhou, the nation's second largest exporter of vehicles and auto parts, is the home base for Guangzhou Automobile Group Co and its tie-ups with Toyota Motor Corp and Honda Motor Co.

As the Guangzhou auto show is held at the end of the year and based in one of the nation's wealthiest and most famous auto cities, it is considered by industry observers as an indicator of the coming year's market.

Toyota Motor Corp vowed to sell 900,000 units next year. The world's largest automaker sold 586,000 units in 2009 and aims to sell over 800,000 units this year.

Volkswagen AG expects its group sales in China to grow 10 to 15 percent next year as the pace of growth slows in the world's biggest auto market, said Bloomberg.

Yang Xueliang, spokesman for Zhejiang Geely Holding Group Co, said that Geely will sell 480,000 to 490,000 units next year, an estimated rise of 17 percent from sales this year.

The estimated growth rate will be narrower compared with this year and last year. Geely sold 329,100 vehicles in 2009, an increase of 48.36 percent, and will sell 24.6 percent more vehicles this year, said Yang.

"China's auto market is easily influenced by government policies," said Yang.

Small vehicle tax breaks, rural auto subsidies and incentives for buyers to trade in old cars, which together led to an increase in sales of more than 48 percent last year and 34 percent over the first 11 months of this year, are factors that are not likely to be in play at the end of the year.

An increase of more than 30 percent can only be brought about by "luck" and more incentives. Geely will launch several new models including its first SUV earlier next year to win more buyers, said Yang.

Lin Mi, a spokesman for car and battery maker BYD Co, said that BYD will sell 550,000 vehicles this year. Lin declined to disclose next year's target on Monday, saying BYD will focus on quality next year.

Lin said BYD is now selling the electric vehicle E6 to fleet buyers in US and will sell to US private customers in 2012. BYD will announce its Europe headquarters next year, said Lin, adding it will be located in Western Europe.