China's Car Sales Surge 36% in June

Stimulus measures are driving the sector's recovery

Sales of China's domestically made cars rose 36.5% year-on-year in June, another sign that government stimulus measures were driving the sector's recovery, state media said on July 9.

Chinese car makers and their joint ventures with foreign partners sold more than 1.1 million units in June, Xinhua news agency reported, citing the China Association of Automobile Manufacturers (CAAM).

In the first six months of the year, car sales increased by 17.7% from the same period in 2008 to 6.1 million units, while output jumped 15.2% to 6 million units, both new historic half-year highs.

June marked the fourth consecutive month that car sales topped 1.1 million units, CAAM said.

The government's revitalization plan for the car industry, signs of a recovery in the general economy and the return of consumer confidence helped the sector, said Zhu Yiping, CAAM's assistant secretary general. "The global financial crisis had some short-term impact on the domestic auto market. But it did not change the industry's fast development trend," she said.

China's total car sales outstripped the U.S. to become the world's largest car market for the first time in January, helped by Beijing's incentives to stimulate domestic consumption. These measures included slashing purchase taxes on cars with engines smaller than 1.6 liters and subsidizing alternativ-energy vehicles.

CAAM predicted that full-year car sales in 2009 would exceed 11 million units, higher than the 10.2 million estimate made at the beginning of the year.

Last year, sales of vehicles in China rose about 8% to 9.4 million units -- a modest growth rate by Chinese standards as demand was hit by the global downturn.

Copyright Agence France-Presse, 2009

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