Car sales in China hit a monthly record of 1.11 million vehicles in March, exceeding U.S. sales for the third month in a row. According to industry figures, tax cuts and rebates for small car purchases are said to have lured buyers back into showrooms.
The China Association of Automobile Manufacturers said sales rose 5 percent in March from a year earlier, when they totaled 1.06 million. The data confirmed that sales remained robust in China, the world’s second biggest car market, despite deteriorating conditions in most major markets.
According to Autodata, Americans bought 857,735 new vehicles in March, down 37 percent from the 1.36 million sold in the same month a year earlier but a 25 percent jump in U.S. sales from February has raised hopes that the worst may be over for an industry battered by global economic malaise and financial catastrophe.
China is bound to eventually overtake the U.S. as the world’s largest auto market, and recent developments have accelerated that trend.
To counter a slowdown late last year, the government halved taxes on purchases of small autos and is spending 5 billion yuan (about $730 million) on subsidies for purchases of light trucks and minivans in the countryside, where most of China’s 1.3 billion people live. Sales of small vehicles with engines of 1.6 liters or less accounted for about 70 percent of the total cars sold.
Trucks and buses make up a larger share of China’s sales than those of the United States or Japan. Some observers say that makes direct comparisons misleading. But many rural Chinese do use such commercial vehicles for everyday family driving.
The larger sales figures for China also obscure the fact that most of its dozens of automakers are small manufacturers serving mainly regional markets.
So far, none of the domestic car manufacturers have managed to meet rigorous U.S. safety standards, and most Chinese vehicle exports go to other developing markets in the Middle East, Latin America and Africa.
But China’s automakers are investing heavily in new technology and tie-ups with foreign market leaders while also launching electric and other alternative fuel vehicles. Meanwhile, they face ever intensifying competition from foreign automakers that are zeroing in on the China market for lack of strong alternatives elsewhere.
Source: Associated Press