Blame it on the Chinese economic slowdown.
According to BMI Research, growth in Hong Kong's new car market will weaken further in 2017 as it is dragged down by a muted growth outlook for the city-state's economy and the continued negative wealth effects on consumers of the struggling residential property market. As such, the firm forecasts a contraction of 12.0% in passenger car sales in 2017, reaching 32,718 units.
"Hong Kong's new car market will remain under pressure in 2017 as a continued slowdown in the Chinese economy - Hong Kong's largest trade partner - coupled with weakness in the domestic real estate market continue to weigh on consumer sentiment and private consumption in the year ahead. Given this, we expect private consumption to grow 2.5% in 2017, well below the 4.5% average seen over the 2009-2014 period," says BMI Research.
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