Car sales growth may fall short of estimates

Updated: 2011-04-12 11:14

By Tian Ying and Bonnie Cao (China Daily)

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BEIJING - China's passenger-car sales may grow at a slower pace this year than was earlier estimated by a group of the nation's automakers after the government ended incentives for purchases and raised fuel prices.

Sales growth this year may fail to reach a previous estimate by the China Association of Automobile Manufacturers for a 10 percent to 15 percent increase, said Dong Yang, vice-chairman of the association.

"I am concerned about whether our growth rate is too low," Dong said at a briefing in Beijing on Sunday. "Some automakers' profitability may be undermined this year and some may even face difficulties in their operations."

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General Motors (GM) Co, China's biggest overseas automaker, posted slower sales growth in the nation for the second straight month in March as the government reinstated a 10 percent sales tax and phased out subsidies for vehicle trade-ins in rural areas. Last year, overall auto sales surged 32 percent to a record 18.1 million, helping the nation remain the world's largest vehicle market for the second year.

"Last year, sales were very much boosted by government incentives," said Klaus Paur, managing director of automotive for Greater China at Synovate Motoresearch in Shanghai. "Now this year these are going away, and it is of course slowing."

Dispatches of cars including multipurpose vehicles and sport utility vehicles to dealerships in March rose 6.52 percent from a year earlier to 1.3 million units, the association said on Sunday. That pace was about one-tenth of the 63 percent sales increase reported in March of last year.

"The overall vehicle sales growth in March was below our expectations," Zhu Yiping, the association's statistics head, said at the briefing in Beijing. According to the association, March has historically been a peak period for car sales in China following the week-long Chinese New Year holiday that was celebrated this year from Feb 2 through Feb 8.

Total vehicle sales gained 5.4 percent in March to 1.8 million units, the auto group said. Vehicle sales for the first quarter increased 8.1 percent to 5 million units.

Passenger car sales during the first quarter rose 9.1 percent to 3.8 million units, according to the association.

GM sold 233,014 vehicles in China last month, the Detroit-based company said on April 2. Deliveries barely rose from March 2010's 230,048 and followed a 6 percent increase in February.

Honda Motor Co's sales fell 5.3 percent last month from a year earlier to 58,611 units, the automaker said on April 6. BYD Co, the automaker backed by Warren Buffett, reported a 41 percent plunge in March sales.

Ford Motor Co boosted sales in China 20 percent to 53,440 units in March. Deliveries of Ford-brand vehicles by Changan Ford Mazda Automobile, the Dearborn, Michigan-based company's Chinese passenger car unit, totaled 42,157 vehicles in March, the carmaker said on April 7.

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