The year of the dragon rolled in with a whimper instead of a roar for China's auto industry. Car sales in the world's biggest auto market fell 24 percent in January from a year earlier, industry figures show.
The China Association of Automobile Manufacturers said Thursday that 1.16 million passenger cars were sold in China in January, down from a monthly record 1.5 million a year earlier.
It said total vehicle sales, including trucks and buses, dropped 26 percent from a year earlier to 1.39 million. Total vehicle sales in January 2011 were 1.89 million.
China's weeklong Lunar New Year holiday, which usually falls in February but began in mid-January this year, was the main reason for the sharp drop. Such factors can play havoc with year-on-year comparisons of data, and sales in February may be similarly distorted, upward.
But the country's once-booming auto market has been losing steam as the economy has slowed in recent months, with vehicle sales rising a scant 2.5 percent in 2011 to 18.5 million.
"I think sales in 2012 will be about the same as last year, or perhaps even worse," said Zhang Xin, an analyst at Guotai Jun'an Securities, in Beijing.
A 3 percent increase in fuel prices this week will further discourage first-time buyers in provincial cities where sales had been growing fastest, since such consumers tend to be more price and cost conscious, he said.
The government also has announced moves to curb use of cars by officials, which would also hit demand, he said.
In some ways the auto market has mirrored the overall economy, with sales gradually slowing as tax incentives and subsidies enacted to fight off the impact of the 2008 global financial crisis expired.
Traffic restrictions imposed by Beijing to help reduce emissions contributing to choking smog have also kept some buyers away from showrooms.
Foreign automakers, whose sales have tended to perform better than their domestic competitors, are also feeling the pinch.
General Motors Co. and its joint ventures reported selling 246,654 vehicles in January, down 8 percent from a year earlier, though up 25 percent from the month before.
Ford said it sold 30,976 vehicles in January, down 42 percent from the 53,340 sold in January 2011.
Both domestic and foreign automakers are continuing to build capacity in China, anticipating strong future sales in this market of 1.35 billion people, where few still own their own cars.
Increasingly, the industry is using factories in China as bases for exports. Although weakness in overseas markets has caused China's overall exports to slow, vehicle sales overseas have surged.
China exported 849,500 fully assembled vehicles in January, up 50 percent from a year earlier. Export sales jumped 57 percent to $10.95 billion _ a monthly record, CAAM reported.