China Auto Sales Growth Slows in July

Passenger-vehicle sales growth slowed in China last month as showroom traffic thinned with the summer heat and the soccer World Cup.

Retail deliveries of cars, multipurpose and sport utility vehicles climbed 11.5 percent to 1.32 million units in July, the Passenger Car Association said today on its website. Sales expanded 14 percent in June.

“July is a traditionally low season for auto sales,” said Vivien Chan, a Hong Kong-based analyst at Oriental Patron Securities Ltd. “With the World Cup in July, there’s also some impact.”

Industrywide vehicle inventories last month stayed at levels indicating greater pressure and risks to dealers, according to the China Automobile Dealers Association. Demand is slowing amid an antitrust investigation by the nation’s main economic planner that has involved foreign carmakers including Daimler AG’s Mercedes-Benz, Volkswagen AG’s Audi and Chrysler Group LLC.

Sales numbers released by the state-backed China Association of Automobile Manufacturers also showed a slowdown. Automakers delivered 1.36 million passenger vehicles to dealers, compared with 1.56 million units in June, according to the auto group.

Japan’s three largest automakers reported declines in China sales last month.

Toyota Motor Corp. (7203)’s deliveries fell 1 percent, Honda Motor Co. (7267)’s sales declined 23 percent while demand fell 12 percent at Nissan Motor Co. (7201)

Antitrust Probe

The National Development and Reform Commission recently contacted Toyota and asked for information about its business practices, though it’s unclear whether inquiries are part of an antitrust investigation by the regulator, people familiar with the matter said yesterday.

China’s government has stepped up scrutiny over how much foreign automakers are charging for vehicles and spare parts. The NDRC has completed an investigation into 12 Japanese companies and will announce the actions it plans against violators, spokesman Li Pumin said this week.

The price cuts are beneficial for consumers and help protect market order by lowering the excessive profits that automakers make, Dong Yang, CAAM’s secretary general, said in a briefing in Beijing today.

Antitrust officials in eastern Jiangsu province have begun investigations of Mercedes-Benz dealers in five cities including Suzhou and Wuxi, while Mercedes-Benz’s Shanghai office was raided by local officials of the nation’s top economic planner, Li said. The government will soon punish Chrysler and Audi for engaging in monopolistic actions, he said.

General Motors Co. (GM), which counts China as its largest market, posted a 13 percent gain last month on demand for its Chevrolet and Wuling vehicles.

A fatal blast at an auto parts factory owned by an indirect supplier, Kunshan Zhongrong Metal Products Co., prompted the government to order a nationwide overhaul of safety practices at factories handling explosive materials.

To contact Bloomberg News staff for this story: Alexandra Ho in Shanghai at aho113@bloomberg.net; Sarah Chen in Beijing at schen514@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net Chua Kong Ho

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