Price cuts help car firms hit sales goals
The mainland car market hit its sales target for the first half of the year, boosting sales 23.31 per cent to 4.37 million vehicles as carmakers cut prices to attract buyers.
China, which surpassed Japan as the second-largest vehicle market in the world last year, is expected to sell 8.5 million units this year, an 18 per cent increase from last year.
Sales of commercial vehicles rose 26 per cent to 1.29 million units in the first half while passenger car sales grew 18.8 per cent to 3.08 million units, the China Association of Automobile Manufacturers said.
Led by Shanghai General Motors, carmakers have been cutting prices to boost sales. Industry players expect prices to continue falling 3 per cent to 5 per cent in the next three years.
Analysts said carmakers still had room to cut prices on new models as previous margins were too high.
The top three carmakers in the first half in terms of sales were First Auto Work-Volkswagen, Shanghai Volkswagen and Shanghai General Motors. The top three car brands were Hyundai's Santana, Volkswagen's Jetta and General Motor's Excelle.
Carmakers including Geely Automobile Group and Chery Automobile, which have their own makes of cars, were also in the top 10 in sales and brand reputation.
Fitch Ratings said the mainland vehicle market would maintain its fast sales growth, at a pace of about 20 per cent, largely driven by robust demand for passenger cars.
The country's growing economy means more consumers in less affluent cities can buy their first cars. Fitch said competition would intensify in second- or even third-tier cities from this year.
China manufactured 4.46 million vehicles in the first half, up 22.36 per cent year on year.
The International Organisation of Motor Vehicle Manufacturers said China last year overtook Germany as the world's third-largest carmaker after Japan and the United States.