Car sales slow for a second month

Hong Kong - Soaring petrol prices and the global economic slowdown have slammed the brakes on demand for new vehicles in Greater China.

September data from the China Association of Automobile Manufacturers shows passenger car sales in Mainland China shrank 1.44% from a year earlier to 552,800 units, with demand for new cars in the world's second-largest vehicle market slowing for a second consecutive month.

The September drop follows a 6.24% decline in August, a major reversal for an industry that has experienced years of double-digit sales growth.

Industry researcher J.D Power & Associates warned of a collapse in the global auto market in 2009 under the weight of the credit crisis and economic stress and forecast China auto sales growth this year at 9.7%, down from last year's 24.1%.

While Ford's mainland sales climbed 7.13% in the first three quarters of the year, the growth was nowhere near its 30% growth for the same period last year.

European car brand Volkswagen posted 13.1% sales growth for the mainland, Hong Kong and Macau during the first nine months of the year, compared with a strong 30% growth during the same period last year.

Michael Dunne, managing director of China operations for J.D Power Asia Pacific, said despite the slowdown, China would continue to see growth this year, driven by competition some 60 global auto brands.

"Driving that demand is 60 different global brands converging on China and saying we want a share of the Chinese consumer and as a result of that competition is intensifying and driving down prices," he said.

The world's biggest automotive market, the United States, is currently in its tenth consecutive month of declining sales.