Auto sales in China rose 8.3 percent in August. (Photo : Reuters)
(Reuters) - Vehicle sales in China rose 8.3 percent in August from a year earlier, maintaining a steady pace though far from the blistering speed of recent years, as a recent fuel price rise and a slowing economy discouraged consumers from buying.
The market is likely to improve in September when the peak auto selling season begins, but even then the growth rate is expected to be far from the rapid expansion of three years ago, industry observers say.
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Sales jumped 82 percent in August 2009 when Beijing's massive investment scheme and stimulus packages spurred demand for cars and trucks. In July this year, they rose 8.2 percent.
"Car sales would usually pick up a bit in autumn during both good and bad times. But truck sales would stay weak unless GDP growth comes back to eight percent," said Sheng Ye, associate research director for Greater China at industry consultancy Ipsos, speaking before the data was released.
Industry-wide sales including passenger cars and commercial vehicles came to 1.5 million in August from a year ago, according the China Association of Automobile Manufacturers (CAAM).
Vehicle sales in the first eight months came to 12.47 million, up 4.1 percent from a year earlier, according to CAAM.
Toyota Motor Corp's China car sales fell in August, their second consecutive month of declines, while General Motors sold 7.3 percent more cars in the country in August, down sharply from the 13.4 percent gain recorded a year ago.
Adding to automakers' woes, China raised fuel prices in mid-August to reflect gains in the international market.
"There was hardly any growth in car sales after the fuel price hike. The situation only started to improve in fourth week (after the rise)," said Cui Dongshu, deputy secretary-general of the China Passenger Car Association.
Deputy Industry and Information Technology Minister, Su Bo, recently ruled out aggressive stimulus measures for the auto sector, but some local authorities have offered support for carmakers.
Chongqing Changan Automobile Co. received 100 million yuan ($15.77 million) in subsidies from local authorities after posting a 45 percent fall in its January-June earnings, while the government of Changchun city in Jilin province is offering up to 7,000 yuan to customers to buy a Besturn sedan made by loss-making FAW Car.
Capacity utilisation of nearly half of over 30 local auto makers is below the break-even level of 75-80 percent, according to a recently survey by AlixPartners.