UPDATE 1-China auto market seen expanding 8-10 pct in 2014-industry group

Thu Jan 9, 2014 3:27am EST

BEIJING, Jan 9 (Reuters) - China's vehicle market is
expected to expand 8-10 percent this year, slightly slowing from
a 13.9 percent growth in 2013, as efforts to rein in pollution
threaten to hit demand in the world's biggest auto market, an
industry body said on Thursday.
    The prediction by the China Association of Automobile
Manufacturers (CAAM) nevertheless points to a continuing rebound
in a market that saw growth slow as low as 2.5 percent in 2011.
    "Geopolitical changes could result in high oil and raw
material prices, which would sap vehicle demand," CAAM's deputy
secretary general Shi Jianhua told a news conference.
    "Other adversaries include backward city infrastructures,
bad urban planning ... and resultant problems such as pollution
and traffic congestion." 
    But in the long term, China's vehicle market still has a lot
of room to grow, bolstered by rising demand from smaller cities,
as well as people's need for second car, Shi said.    
    In 2013, vehicle sales in China rose 13.9 percent to 21.98
million units, CAAM said, beating the industry body's forecast
of 7 percent growth.
    The recovery was partly aided by a rebound in sales of
Japanese cars, whose China sales had slumped in 2012 due to
anti-Japanese sentiment triggered by a territorial dispute.
    China's vehicle sales growth rate plummeted in 2011 and 2012
to 2.5 percent and 4.3 percent, respectively, after a decade of
rapid growth when auto demand often surged as much as 30 to 40
percent a year.
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