Latest data from the China Association of Automobile Manufacturers (CAAM) shows that in October a total of 2.04 million vehicles were produced and 1.98 million vehicles were sold, marking an annual increase in production of 6.7% year on year (y/y), while sales were up by only 2.8% y/y. In the first 10 months of the year, a total of 19.27 million vehicles were produced, up 7.9% y/y, while a total of 18.98 million vehicles were sold, marking a 6.6% y/y rise.

Passenger vehicles (PV), as defined by the CAAM to include sedans, sport utility vehicles (SUVs), multi-purpose vehicles (MPVs), and minibuses and minivans, saw a total of 1.75 million units produced in the month, up 10.4% y/y, with a total of 1.708 million sold, up 6.4% y/y. In the first 10 months of the year, total PV production has hit 16.14 million units, up 11.2% y/y while sales have hit 15.86 million, up 9.8% y/y. Within this period, SUVs saw sales growth of 33.7% y/y, MPVs were up 49.6%y/y, sedan sales were up 3.5% y/y, but minibus/van sales were down 14.9% y/y.

Commercial vehicles (CV) saw a total of 286,400 million units produced in the month, down 11.7% y/y, while sales hit 278,300 units, down 14.9% y/y. In the year to date (ytd) period, a total of 3.126 million CVs were produced, down 6.3% y/y, and a total 3.123 million CVs were sold, down 7.1% y/y.

Exports in the month hit 73,500 units, marking a 5.9% drop from the preceding month of September, and an overall y/y decline of 18%. Of this PV exports hit 43,700 units, down 9.7% month on month (m/m) and down 25.3% y/y. While a total of 29,800 CVs were exported in the month, up by 0.3% over the preceding month of September but down 4.2% y/y.

In the first 10 months of the year, a total of 736,400 vehicles were exported from China, down 8.7% y/y, of which 435,500 units of PVs were exported, down 11.6% y/y, and a total of 300,900 CVs were exported, down 4.1% y/y.

In response, IHS Automotive said that the Chinese vehicle market is seeing more moderate growth with the core passenger vehicle segment propping up the positive growth. IHS Automotive differs from CAAM in terms of segmentation definitions, as we do not include minibuses as passenger vehicles. Without the depreciating minibus segment, the PV segment continues to provide the momentum of growth in China.

However, with a lack of infrastructure projects as well as new regulations coming into effect on diesel fuel standards, demand for CVs is overall seeing a decline. The market is trying to push exports with a number of CV makers announcing alliances in markets within Africa, but overall CV sales are pulling down growth in China. Meanwhile the growth rates witnessed by the PV sector are far lower than seen in previous years indicating an overall moderation in the market.

In September, vehicle sales rose just 2.5% y/y, marking the slowest rise in 9 months with a total 1.98 million vehicles sold.

The demand for private vehicles, for premium brands and for imported models continues to see positive growth in China despite the government's current campaign to reduce conspicuous consumption within its ranks. Data from the Chinese customs shows that in the month of September a total of 111,400 vehicles were imported into China, marking an increase of 6.4% y/y. In the month of August imported hit 124,900 units, marking a 22.7% y/y rise.

In the first nine months of the year a total of 1.066 million vehicles have been imported into China, up 26% y/y, while exports in the period hit 691,700 units, down 3% y/y the customs data states as released by the CAAM.

This continues to confirm IHS Automotive's current forecasts which highlight that demand for premium and luxury vehicles is seeing growth, but it is expected to slow in coming years as more moderate growth in the segment takes hold. However the current situation is that despite government campaigns to rid its ranks of luxurious branded models, private wealthy consumers are still pushing for imports and high end brand vehicles.

The CAAM has in recent weeks highlighted their concern regarding vehicle sales growth in China, with the secretary general downgrading the organizations forecasts by to 7% from a previous 10% growth rate.

The Chinese market is witnessing slower overall growth rates than seen in previous years, but IHS Automotive forecasts for PV sales (sedans, SUVs and only MPVs) for this year are for 10.88% y/y growth in the PV segment to 17.9 million units.

IHS Automotive forecasts for growth in 2015 are for growth rates in the PV segment to hit 7.89%, with a total of 19.36 million units sold. This is based on projections for GDP growth of 7.1% in 2015, compared with 7.3% GDP growth for 2014.

Overall the rates of growth within the segment are slowing, as is the entire market. In 2010, PV sales in China hit 11.6 million, rising to 12.64 million in 2011, with growth of 8.7% y/y. PV sales in 2012 rose a further 7.88% to 13.64 million, and in 2013 increased 18.64% y/y to 16.18 million.

The premium car segment, which includes the main premium players in China such as Audi, Mercedes and BMW, is forecast to see double-digit growth rates in 2015, but the growth rates will see declines. In 2014, we forecast the premium segment to achieve combined sales of 1.8 million units, up 21% y/y, while in 2015 we forecast this segment to hit 2.07 million units, up 14.61% y/y.

IHS Automotive defines PVs as sport utility vehicles (SUVs), sedans, and multi-purpose vehicles (MPVs); we define light vehicles (LV) as PVs and light CVs. In 2014, we expect mainland China's LV sales to increase by 8.9% to 23 million units, and China's GDP to climb over 7% in 2014, which would maintain LV sales momentum this year, despite concerns over the possibility of more license plate limits.

Meanwhile the top players in the market by volume sales continue to be dominated by the top 10 large automakers, which are state owned enterprises with strong international joint venture partners helping to prop up their vehicle sales in China.