Higher prices, more controls slow auto sales in China
China saw the slowest growth in the country's auto market in over a decade last year, according to the Associated Press. Sales rose by just 2.5 percent in 2011, thanks in part to more expensive vehicles and tighter buying controls. All told, consumers brought home 18.5 million vehicles last year, compared to 18 million in 2010. Chinese buyers endured the expiration of various tax breaks and buying subsidies, changes that saw the bottom line on most vehicles increase substantially. In addition, the Chinese government installed new restrictions on car buying in Beijing, further crimping sales growth. Sales exploded by 32 percent in 2010 after China slashed sales taxes and offered hefty subsidies in an effort to push buyers toward the showroom.
By contrast, the U.S. enjoyed fairly expansive growth last year. Vehicle sales in the U.S. increased by 10 percent to 12.8 million units.
Analysts expect the Chinese auto market to continue growing in the coming years, but the pace will likely be more restrained than in the past. The country's housing market is beginning to cool down, which typically yields slower expansion in the vehicle market as well.
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