Car sales in China rose 6.5 percent to 1.35 million units in March, recovering from the lowest growth rate in two years in February but still well below the hectic pace seen last year.
The world's top auto market has lost some of its steam after years of rapid expansion and a major rebound is unlikely in the coming months now that the government has taken back its policy incentives which had helped elevate the country to the world's top auto market in 2009.
"The mini van segment was affected the most after the subsidies were taken away at the end of 2010. I am not expecting a rebound in the near term as there are lot of mini vehicles out there already after two consecutive years of strong sales," said Jenny Gu, an analyst with J.D. Power and Associates.
Steps by local governments to restrict car sales in major cities, such as Beijing, to ease ever-worsening traffic gridlock also curb auto demand in a country whose per capita car ownership is still far below developed markets. A few pessimists, such as Rao Da, head of the semi-official China Passenger Car Association, have even projected a more than 10 percent fall of auto sales for the full year.
Data provided by the China Association of Automobile Manufacturers (CAAM) on Sunday showed a total of 1.35 million sedans, sport utility vehicles and multi-purpose vehicles were sold in March nation-wide.