China's Feb auto prices rise 1.49% to 4-year high

Shanghai, March 11 (Gasgoo.com) China's auto prices in February rose 1.49% from a year earlier, the most since late 2005, as government incentives encouraged more consumers to buy new cars and trucks, Bloomberg reported today, citing the country's top economic planning agency.

China sold 1.21 million vehicles in February, up 46% from a year earlier, after the government extended subsidies for vehicle trade-in and for rural purchases. Prices may moderate as demand growth slows, according to the National Development and Reform Commission's vehicle monitoring division.

"Vehicle prices may stabilize or face downside pressure after the first quarter," an official of the commission said. "As sales growth slows, some dealers are no longer charging extra for consumers who want vehicles on an earlier date, like they did in the past months."

Prices of passenger vehicles prices, which include cars, SUVs, MPVs and minivans, rose 0.36% in February from a year earlier, unchanged from January. As automakers boost production, price wars may re-emerge in the second half and prices may fall about 0.5% by the end of this year.

A later lunar new year helped boost January sales (up 124% to 1.66 mln units). The week-long national holiday started in mid-February this year while it was in late January last year. More customers would buy cars in the run-up to the Chinese New Year (or Spring Festival).