Car prices plummet as supply picks up

China's car market, dogged by rising competition, sluggish demand and unmarketable models, has hit a two-year low, Xinhua (the New China News Agency) reports.

Citing figures from the Ministry of Machine-Building, the agency said that passenger car prices had been particularly hard hit, down 12.9 per cent over the past year.

Illegal levies on car sales had also contributed to the slump, it said.

China produced 757,900 vehicles in the first half, up 2.42 per cent on the year-ago period, the ministry said.

Sales amounted to 720,300 units in the first half, with transactions declining over the four months from March, it said.

Economists said the price slide would probably persist until the end of the year.