Car Sales Cool in China

Deliveries of passenger cars in China slipped 1% to 2.72 million vehicles in December and ended the full year 2017 at 25.37 million, up only 2%, according to LMC Automotive.

The market research company says demand for light commercial vehicles climbed 7% to 332,700 units for December 2017. But full-year volume was flat at 3.22 million. China’s medium- and heavy-duty truck market shrank 8% to 127,300 units in December but finished the year at 1.52 million trucks, up 32%.

LMC says 2017’s modest sales gains for passenger cars represent payback for previous year’s 17% surge. Demand in 2017 was driven by consumers scrambling to beat the year-end expiration of a government tax break on vehicles powered by engines that displace 1.6 liters or less.

Sales growth in China this year will continue to be muted, LMC predicts. It points to a 1.3 million-unit inventory of unsold cars, which it warns will “significantly hamper” this year’s wholesale car market.