China's passenger car sales rose 26% in May, the slowest rate in 2010, preparing the stage for further moderate yet robust growth in the forthcoming months after rapid expansion last year.
The rise in the world's largest car market began tapering off in April when vehicle sales went up by 33%, which was roughly 50% of the rate in March, which analysts said was caused by a higher relative base in 2009.
A more modest rate is predicted for the remainder of 2010, given unrestrained car sales expansion particularly since the 2nd 1 / 4 of last year, powered by government incentives to enhance usage in addition to a near $600 billion economic stimulus strategy.
"Auto sales actually fell in January 2009. It wasn't until April that the market started to pick up strongly," said Chen Liang, an analyst with Huatai Securities. "The May data is still pretty solid, but it's just impossible to match last year's run-away growth rate especially in the second half."
China, which surpassed the US as the world's largest car market in 2009, is becoming a secure destination and a crucial battleground for overseas car manufacturers still recuperating from a more challenging than anticipated industry recession.
An overall total of 1.04 million vehicles were sold in May, in contrast to 1.11 million units shifted in April, the official China Association of Automobile Manufacturers has revealed.
Analysts anticipate vehicle sales will go back to a more measured but more rational rate of growth of roughly 20% this year, due mostly to pent-up demand from customers in lesser cities where cars are no longer seen as a luxury item as prosperity increases.
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