We are revising our forecast for new vehicle sales in Hong Kong to growth of 5.2% in 2017, upfrom a contraction of 9.9% previously. This brighter outlook is largely driven by the positive wealth effectrising asset prices, particularly housing and equity, will have on growth in passenger car market in the citystate.
Vehicle sales will grow by 5.2% in 2017.
The positive wealth effect of booming property sector and strong stock market will boost consumersentiment, driving growth in new car purchases.
The looming threat of a correction in property prices will pose a risk to growth in the new car market dueto the negative wealth effect it will have on consumers and their spending patterns.