China Vehicle Sales Hit Record But Industry Can't Make A Profit

China's auto market is set to become the largest in the world over time, but its growth is set to slow considerably in the years ahead.

According to a recent survey from McKinsey, from 2010 to 2015, vehicle sales in China increased by more than 12% a year. Looking out to 2020, the consultants project that the vehicle market will grow by an average of 5% a year. This is a dramatic slowdown from the  2005 to 2012 period when sales expanded at a CAGR of 18.1%.

2016 was a record year for the country's auto industry. The official China Association of Automobile Manufacturers reported sales and production both hitting new records. The production and sales...