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Passenger car sector outlook brightens

China Daily - China's passenger vehicle sales maintained stable double-digit growth in the first half, raising industry hopes of improvement in the remainder of the year.

First-half sales of cars, sport utility vehicles, multi-purpose vehicles and minivans jumped 16.7 percent year-on-year to 8,178,417 units, the China Passenger Car Association said on Friday.

In June, which is usually a slow time for the industry because of a lower number of working days, the Dragon Boat festival and national entrance examinations for universities, 1,289,665 passenger vehicles were delivered to local consumers, up 12.3 percent year-on-year.

Though sales dipped 3.4 percent from May, the market performance "was actually better and indicated an upward trend for the coming month," said Rao Da, secretary-general of the association.

"More important, looking back to the first half, except February, monthly sales all showed strong double-digit growth, demonstrating that China's automobile market is on track to healthy and sustainable development," said Rao.

He also expressed optimism about sales in July and the second half overall.

"China's new leadership is leveraging a stable economy policy, without stimulus packages this year. This might have a slightly negative impact on the vehicle market.

"However, from a long-term perspective, it supports the sustainability of the sector," said Rao.

He said month-on-month sales growth in July would probably be unusually high "as there are more working days and the market is rebounding".

"Continuously increasing sales will ease the inventory build-up at dealers, which followed a sudden slowdown last year," he added.

The promising market environment has also led vehicle producers, hit by last year's stagnant market, to relax a bit.

General Motors Co, the largest foreign automaker in China by sales, set sales records in June as well as in the first half.

In the first six months, the US-based auto giant delivered 1,567,392 vehicles in China, up 10.6 percent year-on-year. Sales in June were also up 10.6 percent to 236,207 units.

"We have seen strong vehicle demand across China, particularly in the mid-size, upper-medium, luxury and SUV segments," said Bob Socia, president of GM China. "We expect demand for our line-up of passenger cars and commercial vehicles to remain robust through the end of the year."

Driven by strong demand for its new Focus and several SUV models, another US-based vehicle producer, Ford Motor Co, also reported record June sales of more than 75,000 vehicles in China, up 44 percent year-on-year.

Ford's first-half sales in China surged 47 percent to more than 407,700 vehicles.

Though the premium vehicle sector saw fierce competition with price wars due to shrinking market demand, British premium carmaker Jaguar Land Rover said on Friday that its first-half sales maintained strong growth of 16 percent, surpassing 42,000 units.

It attributed the robust market performance partly to efforts to expand its distribution network. In the first half, the British company expanded its dealership network by 31 percent to 170 locations nationwide, mostly in lower-tier cities.

Mercedes-Benz also achieved better sales in the first half after it integrated the distribution channels for domestically produced and imported vehicles.

Sales in China rose 10 percent year-on-year to 76,000 units in the past four months.

 
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