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Auto sales in China up 25% in February

(Agencies)
Updated: 2009-03-11 08:00

Vehicle sales in China surged 25 percent in February, the first gain in four months, after the government cut taxes on some models, helping the country extend its lead as the world's largest automobile market this year.

Sales of passenger cars, buses and trucks climbed to 827,600, the China Association of Automobile Manufacturers said yesterday. The tally in the first two months rose 2.7 percent to 1.56 million, compared with a 39 percent decline to 1.35 million in the US.

China has halved retail taxes on small cars and drawn up plans to give out vehicle subsidies in rural areas to revive demand after automobile sales rose at the slowest pace in a decade last year.

Combined with the country's 4 trillion yuan economic stimulus package, the policies have caused General Motors Corp to roughly double its forecast for China's nationwide automobile market growth this year.

"Consumers are regaining confidence because of the government's stimulus policies," said Ricon Xia, an analyst at Daiwa Research Institute in Shanghai. "Still, vehicle sales may fluctuate in the coming months."

Sales this month will likely be better than in February, Xiong Chuanlin, deputy secretary-general of the automakers group, told reporters in Beijing yesterday. The body is "cautiously optimistic" about full-year sales, he added.

The February sales jump, the biggest in 18 months, was also helped by an earlier Lunar New Year holiday. The weeklong break was in January this year.

Passenger-car sales, including sport-utility and multipurpose vehicles, rose 24 percent last month to 607,300, the association said.

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