Sales of passenger vehicles in China were up 11% in July as new assembly plants have opened and as dealers cut prices to clear out inventory before 2014 model year cars start arriving. The state sponsored China Association of Automobile Manufacturers says that wholesale deliveries of automobiles, SUVs and multipurpose vehicles were up to 1.24 million units in July, beating analysts’ expectations. Among the companies that have opened up assembly plants this year in China are Ford, PSA Peugeot Citroen and Chinese owned Volvo.
The new capacity is planned to fill demand for an anticipated 20 million units this year and as many as 30 million by 2020 as the Chinese market continues to grow. So far in 2013, 12.3 million units have been delivered. While market growth is expected to continue for cars and light trucks in China, there are potential problems. According to some reports, Tianjin and Wuhan may join four other cities, including Beijing and Shanghai that are already trying to reduce ownership of private vehicles to alleviate congestion and reduce pollution. Other reports say as many as eight additional cities are considering implementing those regulations.