Going slow as China car sales cool in June

Car sales in China grew at a moderate pace in June, wrapping up the first half of this year with a single-digit growth, the China Association of Automobile Manufacturers said yesterday.

Delivery of passenger cars and commercial vehicles rose 5.2 percent last month annually to 1.85 million units. The growth rate was 3.3 percentage points less than May while the sales figure was 3.4 percent down on the month. The combined sales of the past six months was 11.68 million units, up 8.4 percent from a year earlier.

According to the China Economic Monitoring & Analysis Center of the National Bureau of Statistics, the reading indicative of the performance of the auto industry still fell within a normal range in the second quarter, though approaching the downward limit of the safe "green zone".

Among the 1.56 million passenger cars sold last month, a majority were still sedans, totalling 994,500 units, up 5 percent from a year earlier. Sport utility vehicles and multi-purpose vehicles continued to perform well, sales growing 35.3 percent and 50.2 percent on annual basis to 325,400 units and 126,800 units, respectively.

According to a survey of 1,000 buyers across China by the CAAM and market research firm Nielsen, more than half the respondents with plans to buy a car next year preferred SUVs, and nearly 70 percent had a budget of more than 180,000 yuan (US$29,038).

"Cars are increasingly becoming a part of lifestyle and personality of Chinese consumers," said Yu Haixia, vice president of automotive consumer study of Nielsen China. "We suggest carmakers focus on mid-to-high-end SUVs and multi-purpose vehicles priced above 180,000 yuan to cater to the needs of sedan and small SUV owners looking for an upgrade."