China’s auto market drives to firm start as January sales surge 7.7%
Print Edition
CHINA’S auto market roared off to a bullish start this year as overall sales in January surged 7.7 percent from a year earlier to 2.5 million units, the China Association of Automobile Manufacturers said yesterday.
Deliveries of passenger cars, including sedans, sport-utility vehicles and multi-purpose vehicles, rose 9 percent to 2.23 million units, data released by CAAM showed.
Strong demand for SUVs offset a decline in sales of sedans. Sales of SUVs jumped 60.5 percent to 784,900 while the number of basic passenger cars sold dropped 9 percent to 1.1 million.
Sales of commercial vehicles also shed 3.5 percent to 271,900 units.
Chinese-brand auto sales rose 16.6 percent from the year before to just over 1 million.
The run-up to the Spring Festival this month was the catalyst for impulsive car buying, the China Passenger Car Association said in a note earlier this month. The association said the car market was extremely vibrant in small towns and villages as many migrant workers returned home with hard-earned money to spend.
“Despite the volatile downward trend of the stock market at the beginning of the year, car sales were driven by pent-up demand and not much dented as in June when the market crashed which caused many to delay decisions about buying or upgrading their cars,” the association said.
It forecasts the car market still has much potential to grow because mega-cities will recover their growth pace and small cities are set to expand car ownership from a low base.
Yesterday’s data are likely to be distorted by the Spring Festival, with car buyers moving up their purchases before dealerships shut for the weeklong holiday.
“Normally it is always good at the beginning of the year” for auto sales, said Zhang Xin of Guotai Junan Securities in Beijing.
“People get their annual bonus and the long vacation encourages their purchases,” he said.
Zhang said he would wait for more data before judging the longer-term trend in sales.
Growth in China’s auto sales has waned since peaking at 45 percent growth in 2009 but is high compared with developed markets. Last year’s sales rose 18.3 percent to 21.1 million.
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