The latest developments in the Chinese light vehicle market are in line with the expectations of global forecasting agency, LMC Automotive.

In a press release, it says sales of locally-made models in China grew by 3.8 per cent year-on-year (YoY) in October to 1.91 million units, further extending the market downswing evident since the start of the year.

Although the October SAAR (seasonally adjusted annual rate) reached a record high of 23.8 mn units, this result was just a touch above August’s 23.7 mn units, providing further evidence of the ongoing lack of market growth.

Closer analysis reveals that locally made passenger vehicles saw sales increase 9.9 per cent Y-o-Y in October, rebounding from the 8.4 per cent YoY seen in Q3 2014.

With dealer-level inventory picking up to 1.48 months in October from 1.42 in September, the higher Y-o-Y growth confirms that the passenger vehicle market is not as robust as the numbers may suggest.

LMC Automotive believes that inventory levels were pushed up largely by the Chinese and Japanese OEMs given that they have not performed as well as their competitors so far this year. As a result, they are highly likely to miss the annual targets they set at the start of the year.

Market share for Chinese branded locally manufactured vehicles reached 31 per cent, nearly four percentage points higher than in Q3 2014. Similarly, albeit to a lesser extent, Japanese brands saw market share climb to 17.3 per cent in October, from 16 per cent in Q3 2014. Going forward, LMC Automotive believes there remains an upside risk to its current PV sales forecast in the last two months of the year.

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