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Light-vehicle sales rebound in June on higher crossover demand
Automotive News China | 2017/7/14

After a two-month decline, sales of light vehicles in China rose 2.3 percent year on year to 1.83 million in June as crossover demand remained strong, the China Association of Automobile Manufacturers said.

Last month, crossover deliveries rose 16 percent to 741,400 vehicles. 

But other segments continued to stagnate in the wake of the government¡¯s decision to raise the purchase tax on vehicles with small engines to 7.5 percent effective Jan. 1 from 5 percent last year.

Sedan deliveries in June dropped 4.3 percent to 883,000 vehicles, and multipurpose vehicle sales decreased 3.7 percent to 163,700. Likewise, microvan sales fell 22 percent to 43,700.

For the first six months, China¡¯s light-vehicle deliveries edged up 1.6 percent from a year earlier to 11.3 million.

Industry insiders said hefty discounting helped the June sales increase. Automakers are struggling to keep pace with 2016 when the market grew at its fastest pace in three years.

Overall vehicle demand in China likely will grow just 1 to 4 percent this year, mainly because consumers made purchases last year to benefit from lower tax rates, said Yale Zhang, head of Shanghai consultancy Automotive Foresight.

In January, CAAM predicted sales would rise 5 percent in 2017, slowing from 13.7 percent last year. The association attributed the expected slowdown on China¡¯s tax increase and economic pressures. It stuck with that forecast on Tuesday.

Peter Fleet, chief of Ford Motor Co.¡¯s Asia region, told Reuters that average vehicle transaction prices in China fell 4 percent year on year in the first half of 2017. "We continue to see negative industry pricing in China," he said.

But there is one bright spot: Sales of electric vehicles and plug-in hybrids jumped 33 percent in June to 59,000 units, the latest CAAM data show.

In the first six months, sales of such vehicles totaled 195,000, up 14 percent.

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