China car sales creep past 20 million

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IOL mot jan10 geely dealership AFP New cars are seen parked at a Geely dealership in Shanghai.

China's new vehicle sales smashed through the 20 million mark last year, growing nearly 14 percent and extending the country’s lead as the world's biggest car market, an industry group announced on Thursday.

Sales in China, the world's biggest market since 2009, surged 13.9 percent to 21.98 million vehicles last year, the China Association of Automobile Manufacturers (CAAM) said, as a recovery in Japanese brands offset the impact of slowing economic growth.

Passenger vehicle sales jumped 15.7 percent year-on-year to 17.93 million units, the group said in a statement.

China's huge vehicle market is critically important to foreign companies, which have looked to its vast potential to take up the slack from flagging sales in Europe, where French car sales hit a 15-year low in 2013 and German car sales also fell.

In the United States, total vehicle sales rose 7.6 percent to 15.6 million vehicles in 2013, according to Autodata, their best annual performance in years.

In 2012, Chinese sales had risen just 4.3 percent annually to 19.31 million vehicles, hurt by slowing domestic economic growth, limits on car numbers imposed by some cities to cut pollution and congestion, and a territorial row between Beijing and Tokyo that hit sales of Japanese-brand cars.

But Japanese brands have continued to recover from the downturn in 2012, when political tensions grew over disputed islands in the East China Sea, causing some consumers to shun their Asian neighbour's products.

MANY CATALYSTS

“Although the economic situation was bad in 2013, there were many catalysts for the car industry,” said Cui Dongshu, deputy secretary general of the China Passenger Car Association, another industry group.

“There was strong demand for replacing old vehicles with new ones. Japanese brands also rebounded after their downturn in 2012 as domestic consumers have high regard for them,” he told AFP.

In its figures, CAAM said sales of Japanese-brand passenger cars amounted to 2.93 million in 2013, but gave no percentage change.

In December alone, total vehicle sales in China - both passenger and commercial - rose 17.9 percent year-on-year to 2.13 million units, CAAM said.

Some foreign companies have already announced record China sales in 2013.

General Motors sold 3.16 million vehicles in the country last year, up 11.4 percent from 2012.

“GM maintained good growth momentum in our company's largest market, despite a modest slowdown in demand for commercial vehicles,” president of GM China, Matt Tsien, said in a statement on Tuesday.

Competitor Ford sold 935 813 vehicles in China last year, up 49 percent from 2012, as the US company introduced more new vehicles to the market.

But analysts said vehicle sales could slow this year from 2013.

“Surging sales are expected to see a slowdown as government restrictions curbing new vehicle sales are enforced across cities in China, as the levels of pollution hit record highs,” IHS Automotive senior analyst Namrita Chow said in a recent report.

Last month, the northern city of Tianjin became the latest to limit cars by capping the number of licence plates it issues annually.

IHS forecasts passenger vehicle sales will rise around 10.4 percent this year.

Cui of the China Passenger Car Association forecasts vehicle sales will rise ten to 12 percent this year, as the one-off boost from the improvement for Japanese brands eases. -AFP


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