Market growth will slow in 2023 as economy cools, CAAM predicts

China’s new light car market will record low growth in 2023 amid a slowing national economy and a lingering chip shortage, the China Automobile Manufacturers Association forecasts.

An industry group said Friday it expects industry-wide sales to grow 1.3% next year, after a 9.4% increase in 2022.

Industry-wide sales of new sedans, crossovers, SUVs, utility vehicles and minibuses will grow from 23.5 million this year to 23.8 million in 2023, according to CAAM forecasts.

CAAM said it is asking the government to extend tax incentives for fuel-powered vehicles in 2023 to avoid a sharp slowdown in the market.

On June 1, the Chinese government halved the purchase tax to 5% for fuel-powered vehicles with an engine size up to 2.0 liters and a price of 300,000 yuan ($43,041) or less.

The tax cut is aimed at stimulating the market after a sharp contraction in April-May when Shanghai, China’s largest city and auto production center, was shut down amid a severe coronavirus outbreak. I was doing it.

Mainly due to tax incentives expiring at the end of December, mini vehicle shipments across China increased by 12% to exceed 21.3 million units in the first 11 months of the year.

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