Average China car prices fall more than 1% in June

Gasgoo.com (Shanghai July 15) - Average prices of domestically manufactured vehicles fell 1.18 percent in June, xkb.com.cn reported today, quoting statistics from the National Development and Reform Commission's price control center. The statistics were compiled from markets in 36 major cities.

The National Development and Reform Commission (NDRC) statistics show that prices for both passenger and commercial vehicles have fallen from last year at 1.41 and .79 percent, respectively. Meanwhile, the prices for imported cars also fell .37 percent from May to June and .47 percent from June 2010. Among them prices for sedans were .67 percent lower than in 2010, while those for SUVs showed almost no change.

Cheng Xiaodong, analyst for the NDRC's pricing factors department, believes that prices are following falling production rates, and may still decrease marginally until stabilizing. Mr. Cheng believes that pressure on inventories is not especially large, with manufacturers not responding to decreasing sales by lowering production rates. He predicts that manufacturers will go out of their way to cut prices in the fourth quarter in order to fulfill their annual sales targets.

Sales across the industry overall grew 2 to 3 percent in the first half of the year, far beneath the goal of 10 to 15 percent.