Is China’s SUV Craze Cooling?

China’s demand for SUVs and crossovers is expanding 46% this year compared with about 2% for the entire passenger vehicle market, says the Shanghai Daily. But the newspaper opines that the stampede may be winding down.

The country’s National Development and Reform Commission reports that SUV prices declined more than 3% in the first 10 months of 2015 compared with a 1% dip for passenger vehicles overall. IHS Automotive predicts growth in SUV demand will slow to 11% in 2016.

That hasn’t deterred carmakers so far. They introduced about 32 new models this year, with more on the way, according to the report. Volkswagen AG, for one, plans to add six locally produced SUVs within the next four years.

Model proliferation is diluting the impact of China’s most popular SUVs. Shanghai Daily says the 10 best-selling models this year control 34% of the SUV segment compared with 64% five years ago.

Last week Fitch Ratings cautioned that profit margins for SUVs, like those of cars, are being squeezed between a rush to add models and a slower sales growth rate for the Chinese car market overall. The credit rating agency predicts narrower margins ahead.