Oct. 13 - China’s monthly passenger-car sales passed 1 million units for the first time, signaling that the government may ease stimulus measures in the world’s largest auto market so far this year.
September sales of cars, sport-utility vehicles and multipurpose vehicles climbed 84 percent to 1.015 million, the China Association of Automobile Manufacturers said in an e- mailed statement today. Overall vehicle sales, including trucks and busses, rose 78 percent to 1.33 million units.
General Motors Co. Chief Executive Officer Fritz Henderson said today that China’s auto sales will continue growing at “a very significant pace” as the nation’s recovering economy spurs demand. The pace of growth may prompt the government to halt tax cuts and subsidies to prevent overcapacity.
“It may end them to prevent the industry from growing too quickly,” said Chen Liang, Nanjing-based analyst of Huatai Securities Co. The government is “probably worried that strong auto demand would put pressure on energy and raw-material supplies.”
The government cut vehicle taxes and introduced auto subsidies in rural areas earlier this year after demand plunged on the global recession. Industrywide car sales have now risen more than 35 percent for six straight months, including a 90 percent jump in August.
GM Sales Double
GM, the largest overseas automaker in China, more than doubled September sales from a year earlier to 181,148 vehicles. In the first nine months, it sold 1.29 million, surpassing the tally for the whole of 2008.
“I don’t think for a second that it’s a blip,” Henderson told reporters today in Shanghai, referring to the overall market growth. “China will continue to grow at a very significant pace.”
Bayerische Motoren Werke AG’s sales in China rose 32 percent to 62,394 during January-September, with the BMW brand’s deliveries reaching 59,400 and the Mini division’s sales reaching 2,934, according to a company statement. China is now BMW’s biggest market after Germany, the U.S. and the U.K., it added.
A credit boom and a 4 trillion-yuan ($586 billion) stimulus package helped China’s economy grow at a 7.9 percent annual rate in the second quarter. The country will stick to a “moderately loose” monetary policy and guide reasonable loan growth to further cement its economic recovery, the People’s Bank of China said in a Sept. 29 statement. It will also continue to implement stimulus measures to boost domestic demand, the bank said.
Full-year vehicle sales may rise 28 percent to 12 million, based on a forecast made by Chen Bin, chief director of the industry coordination department at the National Development and Reform Commission, last month.
Chen also said that carmakers should “keep their heads” to prevent overcapacity as it was unclear whether growth was sustainable in the longer term.
For the first nine months, China’s passenger-vehicle sales rose 42 percent to 7.2 million units, while industrywide vehicle sales rose 34 percent to 9.7 million. By contrast, U.S. sales fell 27 percent to 7.8 million vehicles.