Mainland car sales slow to an expansion of 33pc
Growth in passenger car sales on the mainland continues to decelerate from the sky-high rates seen in the second half of last year, with April's sales rising 33.2 per cent to 1.11 million units, according to official data released yesterday.
Passenger car sales in the world's largest vehicle market broke the one million mark for the sixth time in eight months last month. But sales growth slowed significantly from the 85 per cent rate in the second half of last year due to a higher base effect, according to figures from the China Association of Automobile Manufacturers. Last month's tally was a 12 per cent drop from the 1.26 million passenger cars sold in March.
Mainland car sales began to take off in the early part of last year as Beijing rolled out a number of stimulus measures. The central government slashed consumption taxes on more environmentally friendly vehicles with engines of 1.6 litres and smaller.
Officials also rolled out a number of subsidies to encourage replacement of older cars - the country's answer to America's 'cash for clunkers' programme - and granted villagers 5,000 yuan (HK$5,690) towards the purchase of value cars costing 30,000 yuan to 40,000 yuan. But as the calendar begins to lap last year's stimulus-aided sales figures, monthly growth rates are starting to slow.
Most analysts expect full-year passenger car sales to rise 10 to 20 per cent this year, which would be a dramatic slowdown from January's record 110 per cent increase from a year earlier, due to the effect of a higher base of comparison.
Small-engine cars continue to drive industry growth. The best-selling car on the mainland last month remained BYD's F3, a four-door, five-seat compact car that comes with either a 1.5 litre or 1.6 litre engine.
BYD sold 21,100 F3s last month and 114,000 units in the year to date, according to association figures. Beijing Hyundai's Elantra Yuedong - a more polished take on the standard Elantra, a popular Beijing taxi model - is a distant second place, selling 79,600 units so far this year. The Yuedong is available with a 1.6 litre or 1.8 litre engine.
Beijing cut the tax rate on cars with engines of 1.6 litres or smaller to 5 per cent last year, down from 10 per cent previously. The cuts were partially reversed from January as the rate rose to 7.5 per cent, but sales remain increasingly brisk.
These small-engine vehicles accounted for 70.5 per cent of all passenger car sales in the first three months of the year, according to figures from data provider CEIC. That is up from 69.4 per cent last year and 62.1 per cent in 2008, before the tax cuts were implemented.
By manufacturer, Shanghai General Motors continues to rank first. The joint venture between the Shanghai Automotive Industry Corp (SAIC) and the US car giant sold 82,100 cars in April and 300,500 in the year to date. Rival FAW-Volkswagen ranked second with 70,100 units sold last month, while SAIC's separate joint venture with Volkswagen came in third with sales of 66,000 cars.