China Auto Sales Rise 24.5% on Rush to Beat Expiring Tax CutBloomberg News
Passenger-vehicle sales rose to 1.8 million units last month
Industrywide deliveries rose 13% in year’s first eight months
China’s passenger-vehicle sales climbed for a sixth consecutive month as consumers rushed to buy ahead of a tax cut due to expire at year-end and General Motors Co. and Great Wall Motor Co. emerged from stiff pricing competition with rising deliveries.
Retail sales of cars, sport utility and multipurpose vehicles increased 24.5 percent to 1.8 million units in August, the China Passenger Car Association said Thursday. Deliveries climbed 13 percent to 14.2 million units through the first eight months of this year.
Consumers are anticipating the expiration of a tax cut on purchases of vehicles with smaller engines, according to Cui Dongshu, secretary general of the association. Automakers also are discounting to draw buyers, narrowing the average profit dealers are making for selling a premium car in China to 66 yuan ($10) from 487 yuan in June, according to data compiled by WAYS Consulting Co.
“In our recent dealer interviews, it was clear that pre-buying had already begun to influence industry volumes,” Robin Zhu, an analyst at Sanford C Bernstein, wrote in a report dated Sept. 5. “We expect the pull-forward of demand to persist through the end of the year, and support year over year growth.”
Great Wall, the top-selling sport utility vehicle maker that started to cut prices of its H6 and H2 models last year, boosted deliveries by 25 percent in August. Guangzhou Automobile Group Co.’s sales increased 31 percent, with its SUV deliveries almost doubling. Geely Automobile Holdings Ltd.’s sales climbed 69 percent.
The state-backed China Association of Automobile Manufacturers has urged the government to make the tax cut on small cars permanent to encourage development of fuel-efficient vehicles. China cut levies on small-engine cars by half beginning in October after lobbying by the carmakers association to buttress the nation’s slowing economic growth.
— With assistance by Tian Ying