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Sales of vehicles speed up 25%

CHINA'S vehicle sales accelerated 25 percent in February, reversing from a 14-percent drop a month earlier, as demand for small cars surged after the government launched stimulus measures.

Sales of passenger cars, buses and trucks rose to 827,600 last month, the China Association of Automobile Manufacturers said in a report yesterday.

It's the first year-on-year gain since October after the financial crisis and economic slowdown took their toll on vehicle demand.

The sales increase means that China continues to stay ahead of the United States in new car sales. Vehicle sales for the first two months climbed 2.7 percent to 1.56 million units in China while they plunged 39 percent to 1.35 million in the US.

In mid-January, the central government announced it would halve a tax on small vehicles and pledged to offer 5 billion yuan in subsidies to boost vehicle demand in rural areas after 2008 sales grew at the slowest pace in a decade.

The CAAM said that the positive measures spurred domestic demand for cars with engine capacities of 1.6-liters or less and played a key role in the recovery of the market. Sales of small cars, which composed 70 percent of the passenger car market, jumped 19 percent in the first two months, compared to the 5.8 percent for the overall passenger car market.

The top 10 best-selling models, including FAW Group's Xiali and Geely Automobile's Free Cruiser were major small cars.

Rao Da, secretary general of the China Passenger Car Association, was skeptical whether the growing sales momentum would last for the whole year as the impact of the stimulus would fade. The surge in February sales was also a result of the sales slump in 2008 as snowstorms suspended production and curbed demand.

Led by BYD F3 and Chery QQ compacts, sales of China-branded vehicles totaled 131,700 units, or 31 percent of the market. Passenger-car sales, including sport-utility and multipurpose vehicles, rose 24 percent last month to 607,300, the CPCA said.


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