Wed, Mar 11, 2015 - Page 14 News List

China’s auto sales soar

DEMAND RISES:While the nation’s car sales are up, there are fears that cities might be pressured to cap new vehicle registrations, due to growing concerns about air pollution

Bloomberg

China’s auto sales accelerated in the first two months of this year, led by demand for sport utility vehicles (SUVs) and minivans.

Retail deliveries of passenger vehicles increased by 16 percent to 3.49 million units in January and last month, the China Passenger Car Association said on its Web site yesterday.

Sales of SUVs and minivans surged 66 percent and 20 percent, respectively. The first two months of sales data are taken together to rule out the impact of the week-long Lunar New Year holiday, which falls on different days each year.

The faster pace of growth marks a strong start to a year in which sales are forecast by the state-backed China Association of Automobile Manufacturers (中國汽車工業協會) to increase 8 percent to 21.3 million vehicles. That compares with the target of about 7 percent economic growth announced by Premier Li Keqiang (李克強), the slowest annual expansion for China since 1990.

“According to current market demand, there isn’t a high expectation for growth to exceed projections for the entire year,” said John Luo, a Hong Kong-based analyst at Guosen (HK) Securities Co (國信證券). “The economy plays a big role.”

Wholesale deliveries of passenger vehicles in January and last month climbed 8.7 percent to 3.43 million units, according to the China Association of Automobile Manufacturers. Vehicle sales rose 4.3 percent to 3.91 million units, the association said yesterday.

Concerns that more cities might be pressured to cap registrations of new vehicles were fanned by a popular Chinese documentary film, later removed from major Web sites, highlighting the air pollution choking many of the country’s big cities.

The official Xinhua news agency reported President Xi Jinping (習近平) as saying that the country would “punish, with an iron hand, any violators who destroy ecology or environment, with no exceptions.”

Cities such as Nanjing and Chengdu might announce curbs this year, said Harry Chen, a Shenzhen-based analyst at Guotai Junan Securities Co (國泰君安證券).

Among foreign automakers, General Motors Co posted a 0.8 percent drop in combined January and February sales, while Ford Motor Co’s deliveries increased 15 percent in the same period.

Toyota Motor Corp and Nissan Motor Co reported gains of 14 percent and 12 percent, respectively, with Honda Motor Co the only major Japanese automaker to register a decline in deliveries, down 8 percent from a year earlier.

Japanese automakers might operate their vehicle assembly plants at a 77 percent utilization rate this year, the lowest of foreign producers in China and an indication of its sales prospects, according to projections by Bloomberg Intelligence.

South Korean producers have the highest utilization rate among foreign automakers, followed by US and European carmakers, the data show.

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