China '09 auto sales set to top 11 mln units

Shanghai, July 10 (Gasgoo.com) Chinese auto sales in June grew by 36.5% from a year earlier to 1.14 million vehicles. Total sales for the first half of the year rose to 6.1 million, and the full-year sales in 2009 are expected to exceed 11 million units, xinhuanet.com reported yesterday, citing an industry group.

China's auto sales in June rose at their fastest monthly rate so far this year, putting the country on track to overtake the U.S. as the world's biggest auto market in 2009. Sales in the first half rose 17.7% year on year (y/y) to 6.10 million units, the China Association of Automobile Manufacturers (CAAM).

The official Xinhua news agency online cited the semi-official industry association as saying China is likely to sell more than 11 million autos this year. That would represent a 17.3% increase from the 9.38 million units sold in 2008 and surpass CAAM's earlier forecast of 10.2 million units.

In contrast, U.S. car and light truck sales in June fell 28% from a year earlier to 860,000 units, according to market-research firm Autodata Corp. The annualized sales for the U.S. are 9.69 million, the firm said.

While they have been ravaged in the U.S. by the global financial crisis and credit crunch, vehicles sales have benefited in China from favorable tax policies on small cars and subsidies for vehicle purchases in rural areas.

In China's overall passenger vehicle market, sales rose 48.4% y/y in June to a record 872,900 units, CAAM said. Passenger vehicle sales rose 25.6% y/y to 4.53 million units in the first half, but commercial vehicle sales fell 0.5% y/y to 1.57 million units.

"The most difficult period has passed. We are cautiously optimistic about the sales in the second half of this year and expect quite confidently that 2009 will see sales of 11 million units," Dong Yang, deputy director of CAAM, said yesterday.

He also noted that becoming the world's biggest auto market doesn't mean China can lead the global auto industry, as Chinese carmakers have much to learn and improve in technology, marketing, brand-building and development strategy.