BEIJING -- Car sales in China rose 2.8 percent in April, marking the third consecutive month of single-digit growth as the world's largest auto market cools after years of frantic expansion.
The subdued growth pattern is expected to extend into the summer months, but the market may stir again in autumn, the peak auto-selling season.
"Car sales might still increase moderately for the full year but will unlikely match the hectic pace in 2009 and 2010," said Cao He, an analyst with Minzhu Securities.
In 2009, Beijing introduced tax incentives for small cars and handed out subsidies for farmers who traded in old, oil-guzzling vehicles for more fuel-efficient ones.
It scaled back the package in 2010 and scrapped incentives completely at the beginning of this year to steer the market to a slower but more sustainable growth pattern.
The move had hit the segment for pickup trucks and mini-vans especially hard as farmers were no longer motivated to buy them without government subsidies.
Chongqing Changan Automobile, a major player in that part of the market, ended the first quarter with a 9.3 percent decline in its net income. General Motors Co.'s venture in China, which makes the country's best-selling mini-van, Sunshine, also suffered.
Steps to restrict car sales in Beijing and other major cities in an effort to ease ever-worsening traffic gridlock also curbed auto demand in a country whose per capita car ownership is still far below that in developed markets.
A few pessimists, such as Rao Da, head of the semi-official China Passenger Car Association, have projected a more than 10 percent decline in auto sales for the full year.
But other industry observers hold a more optimistic view.
"Over the past quarters, one of the most important drivers for the market was the lower-tier cities," said Guillaume Sait, senior director of TNS Research International.
"I don't think we should be too worried about sales in the coming months as there is still huge, huge, huge demand in smaller cities."
In April, sales of sedans, SUVs and multi-purpose vehicles came to 1.14 million units, compared with 1.11 million a year earlier, according to data released on Tuesday by the China Association of Automobile Manufacturers (CAAM).
Winners and losers
Most auto makers, such as Ford Motor Co. and SAIC Motor Co. continue to report much slower year-on-year monthly sales gain in April.
But a few others saw their sales decline.
Warren Buffett backed BYD Co Ltd. was the biggest loser amid domestic players in April, with its monthly auto sales down 11 percent from a year earlier, extending the downward trend since August last year.
Toyota Motor Corp.'s April China sales tumbled 23.5 percent as the March 11 earthquake caused unprecedented disruption to car production.