China auto market growth set to slow to 3 percent in 2018: industry body

A man takes a look at BMW cars at a dealer shop in Beijing, China, September 11, 2015. REUTERS/Kim Kyung-Hoon/File Photo

BEIJING/SHANGHAI (Reuters) - China’s auto market, the world’s largest, is likely to see growth slow to around 3 percent next year, a senior official at the country’s auto industry association said, in what would be a second straight year of lackluster growth.

This year, industry-wide vehicle sales are likely to climb 3.5 percent, undershooting a target of 5 percent, Xu Haidong also told state-run TV.

That compares with 13.7 percent growth in 2016 as local and global automakers grapple with a major shift spearheaded by Beijing towards all-electric vehicles and plug-in hybrids, also known as new energy vehicles.

The association said on Monday that China’s vehicle sales had edged up 0.7 percent in November and that sales in the first 11 months of the year had risen to 25.8 million vehicles, up 3.6 percent.

One area of strength has been new-energy vehicles (NEVs), which saw sales in the January-November period jump 51.4 percent and are on track to hit a target of 700,000 NEV sales this year.

China’s policymakers have set strict production and sales quotas for NEVs which automakers must meet starting in 2019, a move that is prompting a flurry of electric car deals and new launches of electric and hybrid models as firms scramble to ensure they do not fall short.

Reporting by Lusha Zhang and Adam Jourdan; Editing by Edwina Gibbs