Car sales surge 20% as con­sumers rush to cash in on ex­pir­ing tax cut

China Daily (USA) - - BUSINESS - By BLOOMBERG

China’s pas­sen­ger-ve­hi­cle sales climbed for an eighth con­sec­u­tive month as con­sumers rushed to buy smal­l­engine au­tos ahead of a tax cut due to ex­pire at year-end, boost­ing de­liv­er­ies at lo­cal car­mak­ers in­clud­ing Geely Au­to­mo­bile Hold­ings Ltd and GreatWal­lMo­tor Co.

Re­tail sales of cars, sport util­ity and mul­ti­pur­pose ve­hi­cles in­creased 20 per­cent to 2.22 mil­lion units last month, ac­cord­ing to the China Pas­sen­ger Car As­so­ci­a­tion. De­liv­er­ies rose 15 per­cent to 18.7 mil­lion units in the first 10 months.

Over the past few months, con­sumers have brought forth their pur­chases to qual­ify for a tax cut on ve­hi­cles with smaller en­gines that is ex­pir­ing at the end of this year, even as the govern­ment said it is look­ing at ex­tend­ing the re­bate. Chi­nese au­tomak­ers such as Geely and Great Wall are among au­tomak­ers that have ben­e­fited from the surge in de­mand for pop­u­lar SUV mod­els like the Boyue and H6.

“Auto pro­duc­tion was ex­pected to ac­cel­er­ate in the fourth quar­ter in an­tic­i­pa­tion of an eleventh-hour sales surge as buy­ers rush to beat the tax cut’s ex­pi­ra­tion at year-end,” Steve Man, a Hong Kong­based an­a­lyst with Bloomberg In­tel­li­gence, wrote in a note. “Pric­ing in the pas­sen­ger ve­hi­cle mar­ket in China is in­creas­ingly com­pet­i­tive. It ap­pears the au­tomak­ers are re­sort­ing to in­cen­tives to gen­er­ate sales.”

Con­sumers have been ad­vanc­ing pur­chases to tap on the tax cut and in­cen­tives of­fered by deal­ers and au­tomak­ers, the trade body said in the state­ment. Whole­sales of cars with en­gines smaller than 1.6 liters rose 26 per­cent in Oc­to­ber, com­pared to 16 per­cent for those with big­ger ca­pac­ity, ac­cord­ing to PCA.

Geely, which has raised its an­nual sales tar­get twice, posted an al­most dou­bling of de­liv­er­ies to 96,158 units in Oc­to­ber, while sales for Great Wall in­creased 31 per­cent to 104,844 units. De­liv­er­ies of Guangzhou Au­to­mo­bile Group Co climbed 33 per­cent to 158,096 units, while Chongqing Changan Au­to­mo­bile Co’s jumped 20 per­cent to 293,902 units.

Gen­er­alMo­tors Co’s de­liv­er­ies rose 5.7 per­cent and Ford Mo­tor Co gained 14 per­cent. Ja­panese au­tomak­ers also saw a pickup in de­mand, with Nis­san Mo­tor Co post­ing an in­crease of 16 per­cent, while Hon­daMo­torCore­ported a 40 per­cent surge in sales.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.