Tax Cut Spurs 25% Rise in Chinese Auto Sales
Auto sales in China surged 25% last month from a year earlier to 827,600 vehicles as a tax cut for small cars helped end three months of declines.
The purchase tax on vehicles with 1.6-liter engines and smaller was cut in half in late January to 5%, helping to push sales of those cars up 19% in the first two months this year from a year earlier to 859,300 units, said the China Association of Automobile Manufacturers, a semiofficial industry group.
February's sales growth, the fastest in more than a year, was inflated by the timing of the weeklong Lunar New Year holiday, which took place in February last year but in January this year, said BNP Paribas analyst Charles Huang.
For January through February, vehicle sales rose 2.7% to 1.56 million vehicles, the association said. Sales of passenger vehicles rose 5.8%, while those of commercial vehicles fell 6.9%.
February's pace is unlikely to be sustained.
'Double-digit growth in March will be difficult,' Mr. Huang said. But he said double-digit growth toward year-end is possible after China's four trillion yuan ($585 billion) economic stimulus kicks in.
Mr. Huang said he expects China's auto industry to grow 8% this year, with sales growth for passenger vehicles faring better than for commercial vehicles, which are more dependent on economic growth. Growth in commercial-vehicle sales may be less than 5% or flat, he said.
China overtook the U.S. to be the biggest light-vehicle market in January U.S. consumers bought 656,976 cars and light trucks in January, while 710,464 light vehicles were sold in China, according to JD Power. |
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