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China’s July auto sales up 6.7 percent

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BEIJING (AP) — China’s auto sales rose 6.7 percent in July but

growth was well below the double-digit surge of the past two years,

an industry group said Wednesday.

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Some 1.01 million passenger cars were bought in July in the world’s

biggest auto market by vehicle sales, according to the

government-authorized China Association of Automobile

Manufacturers. Total sales of commercial and passenger vehicles

rose 2.2 percent from a year ago to 1.3 million units.

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Chinese auto sales soared in 2009 and 2010, driven by subsidies and

tax cuts meant to help the industry rebound from the global crisis.

Sales rose 32 percent last year to 18 million vehicles.

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But that growth has faded due to the end of incentives, higher fuel

prices and efforts by some cities to curb pollution and traffic

congestion by restricting ownership.

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In May, passenger vehicle sales fell for the first time in two

years, declining nearly 9 percent from the same month last

year.

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The slowdown could be a setback for global automakers looking to

China to drive sales amid weak demand in the United States and

Europe.

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Last month, Nissan Motor Corp. announced an $8 billion plan to

double its sales in China over the next five years by launching 30

new vehicles. The company says it wants to focus on faster-growing

emerging markets and reduce reliance on the United

States.

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On Tuesday, a low-cost brand created for China by General Motors

Co., Baojun, unveiled its first car, a sedan that is to be priced

at 62,800 to 73,800 yuan ($9,760 to $11,470).

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Producers are being squeezed between high manufacturing costs and

intense competition that is pushing down prices, said Zhang Xin, an

auto industry analyst for Guotai Jun’an Securities in

Beijing.

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“Some smaller companies will make less and less money and then have

not enough funds to research and develop new technology,” Zhang

said.

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AP researcher Fu Ting in Shanghai contributed.

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