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ECONOMY
Weekly Watch> WEEKLY WATCH NO. 31, 2010> ECONOMY
UPDATED: July 30, 2010 NO. 31 AUGUST 5, 2010
Auto Boom
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China's auto market continues to thrive, though the sales boom is losing some shine.

Vehicle sales nationwide totaled 9 million units, skyrocketing nearly 48 percent from one year earlier, said the China Association of Automobile Manufacturers (CAAM). The auto output was 8.9 million units, a growth of 48.8 percent year on year.

Sales of China's home-made passenger vehicles hit 3.18 million units during the first half, accounting for 47.35 percent of the market.

Sales in June reached 1.41 million units, up 23.48 percent compared to a year ago, but down by 1.83 percent compared to May. This was widely seen as a signal that the market is topping out.

The explosive growth last year was in part inflated by a low comparison base, said Jia Xinguang, a renowned independent auto analyst.

Weighing down market confidence were also uncertainties of the macro-economy and withdrawal of some stimulus measures, said Jia.

The Chinese Government has raised the sales tax on small cars to 7.5 percent this year after halving it to 5 percent in 2009.

Demand may continue to weaken in the rest of the year, mounting pressure on dealers to clear inventories, said Zhao Hang, President of China Automotive Technology & Research Center

But the slowdown is helpful with health of the industry, and a deep market gloom is less likely, he said.



 
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