The release of financial information when each quarter of the year ends, provides valuable insights into specific markets and reliable information those who analyse them to gauge what will happen next. Although we aren’t experts in economics, we are extremely interested to see what has happened to the world’s leading Automotive Market in the first half of 2016.
Well the news looks very good for the Chinese Automotive Market. This generally means that the market is strong worldwide, but we’ll look into that in another article. So, sales in China have risen 8.1 percent from this time last year. This is way ahead of all market predictions as many believed that the automotive market would begin to slow. But, this has not been the case. Market analysts are now however at a crossroads as no one can predict just what direction the sales will go in.
The growth of the market has performed well because of the tax breaks given on vehicles with smaller engines. Last year, the market stalled and as a result the 10 percent small engine tax cut was given. This rejuvenated spending habits and the market soon recovered. The only problem with the tax break however is in its expiration date. Ending December 31 2016, the stop of the break could mean high spending at the end of this year and Poor Sales in the next. On the other hand, prolonging the break will mean poor sales at the end of this year and the inevitable rush and subsequent slow later.
Luckily though, there are still 6 months left to see what course the Chinese government will take. The market seems to be getting stronger, with this June seeing the highest sales rate since the market was in its prime (December 2015). We expect to see the automotive market diminish at some point though, but hopefully not yet and hopefully not sharply…
photo credit: investors.com