In China, new registration, driving regulations impact market growth
- In an effort to realize a GDP growth rate of around seven percent in 2015, China is increasing public investments and devalued the national currency to boost export. While the government is trying to revive the economyto boost automobile sales, there are other factors which are expected to negatively impact the market in the medium to long term.
- Seven cities, including Beijing and Tianjin, implemented registration restriction on passenger vehicles to ease traffic congestion and air pollution; however, such measures result in less automobile sales.
- Tianjin, which introduced registration restriction at the end of 2013, saw a 48percent decline in passenger vehicle demand in 2014. Chongqing, Suzhou and other cities are also considering registration restrictions which may trigger an overall decline of the passenger vehicle market in the future.
- In addition, the increasing number of driving restrictions introduced by local governments across China could also affect consumer sentiment in the long term.
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