China is undergoing a slowdown in airline traffic and car sales as the financial slump starts to pinch.
Carlos Gomes, economist at Bank of Nova Scotia, cut his forecast for U.S. auto sales to 13.7 million vehicles this year and 13.5 million units next year, saying Americans have little room to spend on big-ticket items because they’re already heavily indebted.
The latest evidence that China’s transport boom is hitting a wall came when the International Air Transport Association released figures showing Asia Pacific carriers had a 3.1% year-over-year drop in passenger traffic in August after a 0.5% decline in July. International freight traffic among the region’s cargo airlines, measured in freight tonne kilometres, fell 6.8%.
Analysts say the Games may also be responsible for a 6.2% drop in Chinese motor vehicle sales in August, the first decline in more than two years. The theory is that buyers shied away from dealerships and stayed home to watch TV instead.
GM executives are still predicting annual auto sales growth in China this year of about 12%. They argue the slowdown, also a result of a government-mandated hike in gasoline prices, won’t last.
Source: The Financial Post