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Vehicle sales accelerate 36 percent

CHINA'S vehicle sales rose 36 percent year on year last month, extending the country's lead against the United States as the world's largest auto market, as signs of an economic recovery boosted consumer confidence and government incentives continued to push sales of small cars.

Vehicle sales, including cars, buses and trucks, reached 1.14 million units last month, the China Association of Automobile Manufacturers said in a statement yesterday. It is the fourth consecutive month China sold more than 1 million vehicles, signaling the industry was back on track and consolidating its position as the world's largest auto market.

Vehicle sales for the first-half jumped 17.69 percent to 6.1 million units in China. In the US, sales were down 48 percent to 4.8 million units in the same period, according to Autodata Corp.

"Fast growing rural areas in the process of urbanization and industrialization provided a vast auto market. Meanwhile, the stimulus package also strengthened auto demand," CAAM said.

Passenger vehicle sales rose 48 percent in China last month, the biggest jump since February 2006, as the government acted to boost auto demand, including cutting the purchase tax by half on cars with engines up to 1.6 liters and handed out 5 billion yuan (US$733 million) in subsidies to spur demand in rural areas.

Sales of cars with engine capacities between 1.6 liters and 2.0 liters, which do not qualify for government stimulus measures, rose 17.23 percent last month from a year ago. "Growing demand for cars with engines over 1.6 liters was spurred by consumer enthusiasm after the macro-economy showed signs of recovery and the stock market climbed steadily," CAAM said.

The auto group said it is cautiously optimistic about the industry in the second half and raised its full-year vehicle sales forecast to more than 11 million from 10.2 million previously.

Sales of commercial vehicles edged up 8.34 percent to 269,200 units last month.


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