- Sedan sales slump 13% while SUV deliveries surge 55%
- Passenger vehicle sales are up 6.3% in first eight months
China auto sales barely rose last month after declining in June and July, as discounts and other incentive offers helped prop up sales after a steep rout in Chinese stocks rattled consumer confidence.
Retail deliveries of cars, SUVs and multipurpose vehicles increased 0.6 percent to 1.44 million units in August, according to the China Passenger Car Association. Sales had declined in each of the two previous months, with purchases falling to a 17-month low in July. Deliveries in August climbed 11 percent compared with July.
Automakers and dealers are offering incentives, subsidized insurance, zero-down financing, interest-free loans and higher trade-in prices in a bid to lure car buyers back to showrooms. The steepest rout for China stocks since 1996 last month added urgency to those efforts, with the market downturn leaving would-be buyers with less cash to spend on cars.
“The discounts offered are kicking in,” said Yao Wei, a Shanghai-based analyst at Bocom International Securities Ltd. “They helped to ease pressure on dealers and pass on savings to consumers, so there’s an effect on August sales.”
Sedan sales continued to slump, falling 13 percent, while SUVs surged 55 percent last month, the data show. Total passenger-vehicle deliveries gained 6.3 percent to 12.6 million units in the first eight months of the year, according to the group.
Carmakers including Volkswagen AG and BMW AG have paid out financial assistance to dealers in the past year as demand has slowed along with the economy. Combined profit still plunged by 29 percent at the eight Hong Kong-traded Chinese car retailers during the first six months of the year, according to data compiled by Bloomberg.
Despite the incentives, the outlook for demand remains muted. The proportion of consumers who plan to buy a car in the next year shrank to 19 percent in August, from 21 percent one month earlier, according to a survey by researcher MNI Indicators.
Prices of SUVs probably will continue to drop as competition intensifies, according to Macquarie Group Ltd. Toyota Motor Corp. and Honda Motor Co. have cut starting prices of models including the Highlander and X-Trail and the level of discounting within the segment has risen this year, Janet Lewis, a Hong Kong-based analyst at Macquarie, wrote in a Sept. 4 report.
Toyota and Honda bucked the trend of slowing sales at major global automakers, with August deliveries rising 20 percent and 51 percent, respectively. Nissan Motor Co., which outsells its Japanese counterparts in China, delivered 5.5 percent fewer vehicles last month.
General Motors Co. reported a 4.8 percent decrease in China sales last month, citing “softness in the overall vehicle market.” Ford Motor Co.’s deliveries in August fell 3 percent, while its sales in the first eight months of the year slid 1 percent.
— With assistance by Alexandra Ho