Influential research firm J.D. Power and Associates has reduced its forecast for car demand in China. The revision to 5.95 million units for 2008 marks a 4% decrease from the 6.2 million units forecasted at the beginning of the year.
To put this in perspective, this is still a 9.7% increase from the 5.42 million passenger cars sold in China in 2007 -- although it marks the first time since 2003 that growth has fallen below double digits.
In some ways, this can be seen as encouraging news for a nation that is currently struggling to clean up its dismal air quality in time for the Olympics. Once known as a nation of bicycle riders, China has been increasingly industrializing, and observers have been worried that the nation's cities will soon be cast into a quagmire of gridlock and toxic emissions.
As alternatives to private autos, many have promoted better public transportation, more accessibility for bikes and New Urbanism planning, as well as clean cars.
According to J.D. Power, the reasons behind the lagging demand include a dip in the Shanghai Stock Exchange, relatively high inflation, trouble in overseas markets (including the U.S.), destruction from the country's recent earthquake and higher gas prices.
Chinese drivers now pay approximately $3.36 for a gallon of gas, up from $2.85.
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