China's Increasing Car Sales Trend Continues for the 5th Month

Aug 10, 2016 11:20 AM EDT | Jomar Teves

General Motors Co. and Guangzhou Automobile Group Co., have offered discounts to improve the sales even more.

The sales of sports utility and multipurpose vehicles have increased to an all-time high since February of 2015, of 23 per cent as it sells over 1.6 million units in the month of July. This is based on the China Passenger Car Association.

The deliveries have successfully increased to  a whopping 12.4 million units in July, marking its 7th month. 

The Audi A4 is offered in less the price of 18 per cent to make the disposable from the inventory facilities faster. This is according to Jochen Siebert, the managing director of JSC Automotive Consulting.

Steve Man, an auto analyst at Bloomberg Intelligence says, "It's very positive," referring to the sudden drop in the inventory volume. He adds, "If we do see an improvement in retail sales at the end of this year before the tax cut ends, we might see automakers in a better position to increase production and we'll see an improvement in their earnings."

One of the reasons behind this is the government's reduction on the purchase tax for vehicles that have smaller engines. This enabled the increase in sales of compact and mid-sized SUVs.

Vehicles that have more room is also becoming the trend for Chinese consumers, which is why the sales of SUVs  increased by 45 per cent, far from the 15 per cent increase of the sedan vehicles. The Chinese market is now choosing SUVs instead of sedans as there is now more option to choose from. This is according to a statement released by Man.

He adds that the pricing competition is giving a stress to the sedan car segment.

GM sales have increased by 18 per cent, selling 270,529 units in July alone. Ford Motor Co. sales rose by 15 per cent, selling 88,189 vehicles for July. Toyota Motor Corp. sales increased by 5.7 per cent, selling 97,700 units.

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