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June 13, 2017

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China’s auto sales decline for 2nd straight month

CHINA’S auto sales reversed 0.1 percent to 2.1 million units in May from a year ago to post a second straight month of decline this year, according to the data from the China Association of Automobile Manufacturers yesterday.

“The sales decline is mainly due to the purchase tax for vehicles with engines below 1.6 liters being raised from 5 percent to 7.5 percent at the beginning of this year,” said Yang Jing, a Shanghai-based associate director of Asia-Pacific corporate research division in Fitch Ratings.

“The market appetite remains weak while sales in May recovered a little compared with the sales decline in April. Sales have started to slow since March this year.”

Yang is “cautious on auto sales this year. Previously we estimated the sales growth of this year will be around 6 percent to 7 percent.”

The government’s purchase tax incentive led to a 13.7 percent rise last year.

China’s auto sales grew 3.7 percent to 11.18 million units in the first five months this year and the rate was below the 7 percent rise in the same period last year.

Passenger car sales fell 2.6 percent year on year to 1.75 million units in May, slower than the 3.7 percent loss in April, CAAM said.

The sport-utility vehicle segment was the only one that grew, with sales surging 13.5 percent from a year ago to 714,800 units. Sales of sedans and multi-purpose vehicles fell 9.3 percent and 16.9 percent in May from a year ago to 838,700 and 149,700 units respectively, data from CAAM showed.

Sales of new-energy vehicles reached 45,300 units in May, up 28.4 percent annually. China’s sales of green vehicles grew faster than the sales in April. Total sales of new-energy vehicles in April were 34,361 units, up 7.9 percent from a year ago.

The growth of new-energy sales was powered by electric vehicles. Sales of electric passenger vehicles jumped sharply by 88 percent to 32,438 units in May, the data showed.

“Sales of new-energy vehicles are recovering from the lowest point in the first two months this year. Consumer demand for new-energy vehicles is rising as the local government is accelerating to introduce subsidies,” Yang said.


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