The firm’s data shows that China’s Light Vehicle market in the year 2013 ended with a new sales record being achieved in December, with 2.01 million locally‐made Light Vehicles being moved in the market, up 18.0% from a year earlier.

Meanwhile, demand for Light Commercial Vehicles remained subdued, with sales declining by 1.1% year‐on‐year to 0.45 million units. LMCA adds that December’s robust Light Vehicle sales were fuelled by the Passenger Vehicle market alone, with sales of locally‐made Passenger Vehicles surging by 25.0% on the previous year to 1.56 million units. The selling rate (SAAR) of Passenger Vehicles in the month reached 18.2 million units, even climbing by 0.4% on strong numbers in November.

Demand for Passenger Vehicles in December is believed to have been stronger than reported by wholesales, as the CADA’s dealer‐level inventory index dropped to 1.00 at the end of the month, representing an end of consecutive increases over the previous two months.

The monthly volume of Passenger Vehicle sales is expected reach a peak within the coming few months, shaped by a fast season before the upcoming Spring Festival. With the 2014 Spring Festival falling at the end of January, retail sales began accelerating throughout the month of December, while the pace of sales is expected to slow from the middle of January.

Furthermore, repeatedly reported policies on car purchasing limits have added additional momentum to Passenger Vehicle sales. With the city of Beijing tightening its policy on restrictions and Tianjin announcing its own yearly quota of new car plates, consumers in other major cities have been encouraged to enter the market as soon as possible.

LMCA commented that or the year 2013 as a whole, China’s Light Vehicle sales expanded by 13.9% year‐on‐year. Driven by annual growth of 17.8% achieved in the Passenger Vehicle market, this is expected to be a cyclical peak for the near term.

Besides widespread rumours on car purchasing restrictions pulling car sales forward, we believe the balanced growth pattern between coastal areas and central China to be the cornerstone underpinning China’s stellar Passenger Vehicle sales performance in 2013, while an improving economic environment throughout the second half of 2013 has also played an important role towards guaranteeing consumption sentiment.

LMCA concluded: ‘Looking forward, these factors are expected to remain positive for Passenger Vehicle sales into the year 2014, despite a diminishing effect and further volume loss from car purchasing restrictions in the cities of Beijing and Tianjin. We currently expect annual growth of 13% for China’s Passenger Vehicle sales in 2014, and 11% for the Light Vehicle market as a whole. On the contrary, we believe the risk to China’s Passenger Vehicle sales in 2015 is now on the downside.’