China car sales surge in June

[rickaren]

China car sales surge in June

Posted Thursday, Jul 9, 2009, 11:42 am in Employee News

China’s passenger car sales rose 48 percent in June from the same month last year, consolidating a remarkable recovery that has catapulted China to top position in the world vehicle market so far this year, according to semi-official data released on Thursday, the Financial Times reported.

The strength of China’s vehicle sales—total vehicles sales rose 18 percent for the first half year to 6.1 million from the same period last year—has surprised auto market analysts, government officials and even the country’s automakers, many of whom are scrambling to produce enough vehicles to meet demand, the Times said. Some auto dealerships have reported shortages of vehicles, and western automakers like Volkswagen and General Motors have had to sharply increase production at their Chinese joint ventures to meet local demand, the paper reported.

Like other sectors of the Chinese economy, car industry growth this year was jump started by the government, which in January announced tax breaks on small cars and subsidies for vehicle purchases in rural areas, the Times said. But car segments that were not targeted by tax breaks or subsidies also saw strong growth in sales, auto industry analysts said on Thursday, according to the story.

Lending for car purchases had not risen—most Chinese buyers buy vehicles with cash—but higher levels of liquidity in general fed through to more corporate purchases of vehicles, analysts told the paper. On Wednesday, India announced that its car sales rose 7.8 per cent in June from last year, while in Russia, car sales slipped 56 per cent year-on-year in June, the story said. (Financial Times)