China’s vehicle sales jumped 32 percent last year as government stimulus measures and economic growth helped the nation stay the world’s largest auto market for a second year.
Total auto sales, which include cars, trucks and buses, rose to 18.06 million, while passenger-car deliveries gained 33 percent to 13.8 million, the China Association of Automobile Manufacturers said yesterday.
Sales of cars and light trucks in the US gained 11 percent to 11.6 million in 2010, according to researcher Autodata Corp.
China’s annual vehicle sales jumped about 10-fold in the past decade as rising affluence and government stimulus boosted demand.
However, the pace of growth may slow this year after the government withdrew tax breaks and rural subsidies that helped it overtake the US auto market, said Jenny Gu, an analyst at J.D. Power & Associates.
“The pace of sales growth in the past two years was abnormal and driven by government policies,” Shanghai-based Gu said. “With the removal of those incentives, passenger-car growth may fall to about 10 percent a year during the next four years.”
China’s automobile sales may increase 10 to 15 percent this year, the Chinese auto association said
Total vehicle sales rose 17.9 percent to 1.67 million units last month, with passenger-car sales increasing 18.6 percent to 1.3 million units, the association said.
It predicted that growth this year would be about 10 to 15 percent.
China’s total auto sales may reach 20 million this year, Booz & Co and Nomura Holdings Inc said.
In contrast, light-vehicle sales in the US may be as much as 12.8 million units, said Ashvin Chotai, the London-based managing director of Intelligence Asia Automotive.
US light vehicle sales peaked in 2000, with annual deliveries of 17.4 million vehicles.
The pace of growth in China may fluctuate in the first quarter, association deputy secretary general Gu Xianghua told reporters in Beijing yesterday.
More cities may follow Beijing’s example and impose restrictions on car ownership to curb traffic congestion, he said.
China this month raised the sales tax on vehicles with engines of 1.6 liters or smaller to 10 percent, from 7.5 percent last year. Subsidies given for trade-in vehicles and to rural residents to buy vehicles were also phased out.
Chinese carmakers will face “pretty big difficulties” this year after the government scrapped stimulus measures, association vice chairman Dong Yang said.
While Chinese automakers that gained the most from state subsidies may experience slower growth this year, General Motors Co and Volkswagen AG — the two largest foreign automakers in the country — may benefit because they sell a wider range of vehicles, said Klaus Paur, China managing director of automotive consultant Synovate Motoresearch in Shanghai.
More expensive models from overseas carmakers will also experience growing demand, he said.
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