Auto sales jump 78% in September

09:28, October 14, 2009      

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China has widened its lead over the U.S. as the world's top auto market, with September sales shooting up by 78 percent, spurred by government calibrated tax cuts and increasing wealth of ordinary Chinese households.

Sales totaled 1.33 million vehicles last month, with passenger cars climbing 84 percent, the China Association of Automobile Manufacturers reported. It was the seventh month that China's auto sales surpassed 1.1 million vehicles.

Sales in smaller cities have been booming as automakers rush to woo first-time car buyers. Those trends have global automakers looking to the world's most populous nation to drive revenues as demand in other markets remains sluggish.

China now leads the world in auto sales, with 9.66 million vehicles selling over the first nine months of the year, up 34 percent from the same period last year. The U.S. ranks second, with January-September sales at about 7.8 million cars and light trucks, according to Autodata Corp.

GM's Buick Excelle, Hyundai's Elantra sedan, the Toyota Camry and VW Jetta are among perennial best sellers.

After a sharp slowdown late last year, the Chinese government halved taxes on purchases of small autos. It is spending 5 billion yuan on subsidies for purchases of light trucks and minivans in the countryside, where most of China's people live.

In the meantime, a 4 trillion yuan economic stimulus package has pumped money into construction and other projects, helping to blunt the impact of the global slowdown and spur a recovery.

"The China market has benefited from economic stimulus that has generated primary demand. We see substantial opportunities in product-driven, competition-driven growth," General Motors Co.'s chief executive, Fritz Henderson, told reporters in Shanghai on Tuesday.

Economic growth was 7.9 percent in the second quarter, boosting confidence that growth will at least match and possibly exceed the government's 8 percent target for the year.

China's is on track to surpass the U.S. is sales for the year, Henderson said, "and its importance for us and our joint venture partners should not be underestimated."

Despite China's growth, September sales were far from a U.S. sales peak of 1.8 million vehicles in July 2005, according to Ward's AutoInfoBank. Industry analysts don't expect U.S. sales to return to that level for many years.

Overall, cars with engines smaller than 1.6 liters accounted for 70 percent of passenger car sales in September, the Chinese auto association said.

Source: Agencies/People's Daily Online

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