By Wang Qing, Research Team on “A Dynamic Analysis of Chinese Market Performance”, Institute of Market Economy, DRC

Research report No.30, 2017 (Total 5105) 2017-3-6

Abstract: Driven by relevant policies, China’s car market saw a big boom in 2016. The number of cars sold was 28.03 million in the whole year, with a year-on-year growth of 13.7%. With the fall of car price, business profits shrank slightly. The level of market concentration kept declining and car stocks were remarkably reduced. China’s civilian car parc and car parc per 1000 people have reached 180 million and 132 respectively. With the waning effect of stimulus policy measures, the car market will face great pressure and risks in 2017.It is estimated that the sales volume of home-made new cars will be 27 million. With the tangible fall of growth rate, there might be a negative growth in some months after the second quarter. The major task of car market in 2017 is to resolve the adverse effects on normal market performance caused by stimulus policy measures adopted earlier. With regard to the implementation of relevant policy measures, and in view of the adjustments made in the course of development as well as supply-demand changes and technological innovations, the government needs to deal with problems or contradictions covered up by long-term high growth, fully tap latent potential of car demand and make the market return to the potential growth level as soon as possible.

Key words: car market, drop, forecast, policy options