Stimulus sparks rise in car sales

By Pan Xiaoyi | June 6, 2009, Saturday |

Print Edition

SOUTH Korea's Hyundai Motor and Japan's Honda reported strong growth in China sales last month.

The figures follow General Motors and Volkswagen reports of increased sales in China as more people bought cars with smaller engines after the government cut their purchase tax by half.

"The worst time of the auto industry has obviously passed thanks to government's stimulus package and boosted demand in the second and third-tier cities," said Li Chunbo, an analyst of CITIC Securities Co.

Hyundai Motor Corp, including its affiliate Kia, saw sales rise by 67 percent to 68,195 units last month, compared with the same period last year.

Guangqi Honda Automobile Co, one of Honda's joint ventures in China, said sales were up 9.43 percent last month from a year ago to 30,296 units. Its Accord model had sales of 14,048 units last month.

"We are optimistic about the second half after the auto market had stable growth in the January-May period. We expect more stimulus packages will be revealed to make sure growth remains sound," a Guangqi Honda official said.

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Stimulus sparks rise in car sales

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