An unseasonably cold November and heavy smog prompted Chinese consumers to step up their vehicle purchases, driving automobile sales to their biggest gain in nine months and underlining the challenge the government faces in controlling air pollution.
Sport utility vehicles continued to be the most popular choice last month, followed by minivans, while sedan sales fell, according to the China Passenger Car Association. Total retail sales of passenger vehicles rose 18 percent last month to 2.02 million, the fastest increase since February.
“Adverse weather conditions played a role in November’s strong sales showing,” the association said in a presentation accompanying the sales statistics. “The unusual cold was followed by off-the-charts smog levels. Those with children are more inclined to buy cars, given the perception that the air inside a vehicle is cleaner.”
A correlation between auto sales and smog levels adds to the challenge that China faces in cleaning up its dirty air. A surge in car ownership over the past decade has been cited, together with coal-fired power plants, as leading contributors to air pollution, prompting the government to impose vehicle registration quotas in major cities and promote emissions-free electric vehicles.
Even so, the government slashed a purchase tax in October to protect economic growth after auto demand slowed in the first nine months.
“It is ironic that the smog is making people more interested to buy cars,” JSC Automotive GmbH Shanghai-based managing director Jochen Siebert said. “It’s funny, but it’s logic that we probably won’t understand.”
Still, some analysts see the tax cut and discounts by automakers as the primary driver for last month’s surge in sales. The government in October cut a 10 percent purchase tax by half for vehicles with engines with displacements of 1.6 liters or smaller.
“I don’t believe pollution is a factor, as there was pollution in previous years,” Autoforesight Shanghai Co (上海預致) Shanghai-based managing director Yale Zhang (張豫) said. “It’s the purchase tax cuts that made sales go up so much.”
Great Wall Motor Co (長城汽車), the country’s largest producer of sport utility vehicles, is benefiting from the resurgent demand. Sales of its sport utility vehicles, many of which qualify for the tax cut, surged 25 percent last month from a year earlier.
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