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November 10, 2009

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China's auto sales surge 72%

CHINA'S auto sales accelerated 72 percent last month from a year earlier due to a series of supporting measures, and car makers are hoping the government will continue them next year.

Car makers in China sold a combined 1.22 million units last month, the China Association of Automobile Manufacturers said yesterday. The nation's vehicle output jumped 80 percent during the same period.

For the first 10 months of this year, auto sales surpassed 10.8 million units, an increase of 37 percent year on year.

General Motors Co reported its China vehicle sales more than doubled to 166,911 units last month from a year ago. Japan's Mazda Motor Corp said its sales surged 32 percent to 14,498 units last month, its second-highest monthly record.

Most car makers benefited from the sizzling sales in China after the government in February offered subsidies and halved the sales tax on vehicles powered by engines less than 1.6 liters.

Sales got a boost from the favorable tax the government implemented, confirmed Rao Da, secretary general of China Passenger Car Association.

As the sales tax will expire by the end of this year, car makers have been lobbying the government to keep it and other supportive policies to ensure the market will continue to grow next year.

Zhu Hongren, spokesman for the Ministry of Industry and Information Technology, last week said the government is considering extending the tax, which may cover a wider range of cars.

The decision, which will be made after soliciting opinions from industry associations and car makers, also needs approval from the State Council, China's Cabinet.

Earlier media reports said some proposals suggested that a lower tax from 20 percent to 50 percent will be charged on vehicles with engine capacity less than 2 liters. The sales tax on cars with engines smaller than 1 liter will also be abolished.


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