Slowing growth, vehicle and emissions restrictions will provide challenges and opportunities this year
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Signs of a slowdown? Image: Experts at the China Association of Automobile Manufacturers expect automotive sales to grow 7.2% in 2015 to 25.13m units.
In second and third tier cities, growth will come from the luxury segment as residents trade up, while buying potential fourth and fifth tier cities will begin to be unleashed.
According to the report, sales of SUVs and Minivans will continue to grow, with sales increasing to 5.1m and 2.58m units, respectively. Some also expect that new energy vehicles will account for as much as 11% of new vehicle purchases in 2015.
Amid a nationwide clampdown on ostentatious displays of wealth, many are predicting a decline in the nation's luxury segment. IHS Automotive believes that although luxury segment growth may never again reach the spectacular 122% growth in 2012, this year should see the segment expand by a healthy 62%.
As in 2014, emissions regulations and license plate restrictions may also slow growth. In the booming industrial city of Shenzhen the government has limited the number of license plates issued to just 100,000 each year. By comparison, Beijing issues around 240,000.
China's auto sector now generates a staggering 6tn ($981bn) to the economy each year, creating 4m direct jobs and 40m indirect jobs, according to Wang Ruixiang, chairman of the China Machine Industry Foundation.