Passenger vehicle sales surged 29 percent in China last month, led by small carmakers Geely Automobile Holdings Ltd (吉利汽車) and Mazda Motor Corp, as consumers seeking to beat an expiring tax cut helped clear inventory on dealer lots.
Deliveries of sedans, minivans, sport utility and multipurpose vehicles to dealerships rose to 2.27 million units last month, the state-backed China Association of Automobile Manufacturers said yesterday.
The government has so far stayed silent on whether it would extend a tax cut on purchases of vehicles with smaller engines beyond Dec. 31.
Sales could plunge next year if levies are allowed to double to 10 percent, China Passenger Car Association secretary-general Cui Dongshu (崔東樹) said.
A slump in demand would worsen a capacity glut and dent profit margins, Bloomberg Intelligence analyst Steve Man said.
“The expiration of the current purchase tax cut is encouraging consumers to catch the last bus and bring forward their car purchases,” said Huang Xiaowei, an analyst with Shenzhen-based WAYS Consulting Co (威爾森諮詢). “Dealers are preparing stocks for the surging demand at the year-end.”
A gauge of vehicle inventory last month fell for a third straight month to the lowest level in two years, the China Automobile Dealer Association said.
Dealers of Japanese brands saw profits increase by 27 percent in August from a month earlier to 1,851 yuan (US$275.65) per vehicle after scaling back discounts due to strong demand, WAYS Consulting said.
Mazda said its sales in China last month jumped 49 percent from a year earlier, led by models including the Axela compact, which qualifies for the tax cut.
Geely raised its full-year sales target after deliveries last month surged 82 percent from a year earlier.
General Motors Co’s sales gained 16 percent to 343,773 units, with deliveries of Cadillac sedans increasing 63 percent.
Great Wall Motor Co’s (長城汽車) sales rose 49 percent to 97,685 units, with sport utility vehicle deliveries reaching 87,627 units.
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