CHINESE VEHICLE sales grew just 2.5 per cent last year, as the withdrawal of government stimulus measures tamed the exuberance of the car market.

By contrast, the US last year bounced back to become the world’s fastest-growing big car market, with car and light truck sales climbing about 10 per cent. But at an estimated 12.8 million units last year, US light vehicle sales were still far below China’s 18.5 million.

A decade ago, the US car market was at least 10 times the size of China’s. Some Chinese car buyers may have held off purchasing cars because of credit tightening or fears of inflation, but few analysts see the slowdown as a bellwether of slower Chinese economic growth.

Most Chinese car analysts believe the main reason for the slowdown was the withdrawal of tax incentives introduced by Beijing as part of a 2008 economic stimulus package, which helped boost vehicle sales by 46 per cent in 2009 and 32 per cent in 2010.

Those incentives, for small engine cars and mini commercial vehicles, were withdrawn completely last year.

Car sales – a category that does not include small commercial vehicles that were hit hard by the incentive cancellation – rose 5.2 per cent to 14.5 million.

Foreign-invested carmakers did better. General Motors last week said Chinese sales rose 8.3 per cent last year, while Ford reported a 7 per cent year-on-year increase.

Analysts believe vehicle sales could rebound.

“The times of disproportionate growth in 2009 and 2010 are definitely over,” said car market analyst Klaus Paur of market research company Ipsos.

But Mr Paur still expects 10 to 12 per cent growth in the car market this year, which “can be considered healthy and significant . . . in light of the long-term potential of the Chinese market”. – (Copyright The Financial Times Limited 2012)