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Improving Supply and Demand Structure: Key to the Smooth Performance of Automobile Market in 2016(No.25, 2016)


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

Research Report No.25, 2016 (Total 4908) 2016-3-18

Abstract: The automobile market continued its slow growth in 2015 with price level declining significantly and the performance indicator and market shares of some leading firms both decreased to some extent. In 2015, China’s home-made new car sales increased to 24.6 million units, with a year-on-year growth of 4.7%. As a whole, the market operation of 2015 was obviously influenced by the macroeconomic performance and policies. China’s home-made new car sales in 2016 is predicted to be around 25.6 million to 25.8 million units,with its real growth standing at 4.1%-5.0%, close to or slightly lower than the potential growth rate. With the termination of strong domestic demand for cars, China’s car market has gone through the transition from a high-speed growth to a moderate-speed growth. During the 13th Five-Year Plan period, China’s car market will keep its average annual potential growth rate of 5% as a whole. During this period,the supporting role of demand to market growth will become weakened gradually, and elements on the supply side will play an increasingly important part day by day. Based on the current development trend and influencing factors of China’s car market, the major policy to promote the sustainable and healthy development of China’s car industry and car market is to place extra emphasis on the improvement of the supply and demand structure.

Key words: car market, prediction, policy