Light vehicle sales for 2009 will top 11 million units, J.D. Power says
J.D. Power and Associates has revised its forecast for China's 2009 light vehicle sales to 11.03 million units, up from the 9.65 million units it predicted at the beginning of the year.
The new forecast represents a 26 percent growth over 2008.
"The impact of the government stimulus was higher than previously anticipated," the consultancy says in its latest monthly report for the Chinese auto market, released last week.
Demand for passenger vehicles will increase 21 percent year-on-year to 7.20 million units while that for light commercial vehicles will surge 35 percent to 3.83 million units, says Power.
In December last year, the Chinese government announced 4 trillion yuan ($585.7 billion) of fiscal stimuli to revive the domestic economy in the face of a global recession. It also cut the purchase tax on 1.6-liter and smaller vehicles to boost auto sales.
These measures have resulted in a quick recovery of the domestic auto, real estate and stock markets.
Although the government's stimulus measures have been highly successful so far, Power questions how long they can be sustained, or continue to be effective in the face of gloomy prospects for the world as a whole.
"Though we have raised our expectations of the Chinese market for 2009, we remain cautious over the long run," the consultancy says in its report.
