Sales remain on track thanks to SUVs, cut in small-car tax

Atax reduction on smaller vehicles and the release of new models helped Chinese passenger vehicle sales grow 6.8 percent year-on-year in the first quarter, industry data shows.

Automakers sold 5.64 million units to Chinese customers from January to March, according to the China Passenger Car Association on April 11.

Toyota Motor Corp and Ford Motor Co delivered the most: Toyota with 291,000 units, up 28 percent year-on-year; Ford with 314,454, up 14 percent.

Niu Yi, senior public relations manager at Toyota China, says growth was helped by the sales performance of its mid-sized models and compact cars, such as Corolla and Levin, and the localization of its hybrid models.

Data from Toyota show its local joint venture, FAW Toyota Motor, sold 155,700 vehicles in the first quarter, an increase of 34.3 percent on the same period last year. Another joint venture, GAC Toyota Motor, sold 110,600, up 19.7 percent.

In March alone, Toyota sold 100,500 vehicles, a 40.6 percent increase year-on-year.

Charlie Ma at Ford China says the continued high demand for sport utility vehicles contributed to the sales boost. Ford sold 79,964 SUVs, up 38 percent on the first quarter last year.

Zhang Yu, managing director of Automotive Foresight Co, says a tax reduction for vehicles of 1.6 liter or below, implemented in October, was the main reason for the sales growth.

Some have even credited the move with saving the auto industry.

"It's like the government advertised for the industry," Zhang says. "It's very effective, and the customers also saw government support on low-emission vehicles ."

However, he adds, the 6.8 percent growth in sales is much lower than the expected 25 percent.

"Normally, the pace of the quarter should be similar to the previous one," he says, referring to last year's fourth quarter, when 6.57 million vehicles were sold.

"Economic conditions in the past few months affected customers' purchasing decisions and led to a sales drop in the luxury segment," he says, explaining that the stock market rout in January and the sharp rise in real estate prices in February have threatened China's middle class, who are the major buyers of cars, especially premium models.

Last month, passenger car sales rose 7.8 percent to 1.92 million, according to the China Passenger Car Association.

duxiaoying@chinadaily.com.cn

(China Daily European Weekly 04/15/2016 page25)