...No Immediate and Direct Impact on Ratings from Deceleration in China New passenger car sales growth is stalling in China, with growth declining to 3.4% in July 2015 YTD (including year-on-year declines of 3.2% in June and 6.6% in July 2015) from 16% in 2013 and 10% in 2014. This is mostly due to the recent fall in share prices on China's stock market and a weakening economy, which have had a negative effect on consumer sentiment and wealth. We now assume 3%-5% passenger car sales growth in 2015. What to Watch Growth Rates and Market Shares: Weakening macroeconomic data and the softness of the stock market are likely to have a further negative impact on new car sales in the coming months. Domestic players have also regained market shares as Tier 1 and Tier 2 cities are underperforming more rural and inland regions, where customers favour Chinese brands' more basic and cheaper vehicles. This should weigh on European manufacturers' sales. Pricing: A usual reaction from carmakers facing a sales...
