China is supposed to be the market which gets the global car industry back on its feet after the losses caused by three years of recession. The China market, which produced 18 million car and light truck sales, is also supposed to be large enough to offset a slowing of sales in Europe. Those piece of conventional wisdom were battered today by more evidence that the growth of the China vehicle market has ended for now.
Sales moved higher by only 4.5% in March to 1.4 million, and the first quarter total was down by 1.3% according to the China Association of Automobile Manufacturers. Most of the blame was put on an economy which is no longer in hypergrowth and high fuel prices. Rosy forecasts by global manufactureres are also likely to be undermined by GM’s (NYSE: GM) and VW’s powerful market shares which will be hard to overcome even if the market was growing.