China automobile industry body slashes sales forecast

BEIJING, July 8 Fri Jul 8, 2011 5:41am EDT

BEIJING, July 8 (Reuters) - China's main automobile industry body has cut its growth forecast for vehicles sales in 2011 to 5 percent, from 10-15 percent, citing weaker demand after the withdrawal of state subsidies.

The revised sales forecast for the world's top auto market was announced on Friday by Dong Yang, secretary general of the China Association of Automobile Manufacturers.

Vehicles sales have suffered since Beijing started scaling back incentives for buyers in 2010, and scrapped them entirely at the end of last year to stabilise the market.

The incentives had included tax incentives for small cars and subsidies for farmers who traded in old, gas-guzzling vehicles for more fuel-efficient models. (Reporting by Fang Yan; Editing by Chris Lewis)

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