China's February Car Sales up 46%

CAAM attributed the car sales growth to the economic rebound and last year's lowering of taxes on purchases of small cars

(Caixin Online)China's car sales have maintained an intensely robust growth rate this year, boosted by a revival in the economy and lower taxes on purchases of cars with smaller engines.

According to data from the China Association of Automobile Manufacturers (CAAM), China's February car sales reached 1.21 million units, rising 46 percent year-on-year. For the first two months this year, car sales increased 83.8 percent to 2.88 million from the same period last year.

However, the February figure is 27 percent lower than January due to the week-long Lunar New Year holiday.

Dong Yang, deputy chairman of the association, attributed the sales growth to China's steady economic recovery and extension of preferential government policies on car purchases.

To stimulate the country's auto industry amid the global financial crisis, the government halved the 10 percent purchase tax on vehicles with engines of 1.6 liters or less last year. The policy has been continued this year despite the partial reinstatement of taxes to 7.5 percent.

In contrast to the distressed auto market worldwide in 2009, China's sales for the year hit 13.64 million units while production reached 13.79 million units, overtaking the United States to become the world's top auto maker and market.

CAAM forecasted that China's car sales in 2010 may reach 15 million units, but warned that uncertainties remain due to un-foreseeable risks during the global economic recovery.

Full article in Chinese: http://business.caing.com/2010-03-09/100124249.html