China's automobile sales grew nearly 64% in July 2009 on the back of the upsurge in country's economy and government's positive efforts.
The China Association of Automobile Manufacturers revealed that auto sales in China surged 63.6% in July 2009 from July 2008, reaching up to 1.09 Million Units, marking the fifth straight month for sales of over one million vehicles, reported The Wall Street Journal.
Passenger car sales in the country recorded a year-on-year increase of 70.5% in July 2009 to 832,600 Units whereas increase of 30.9% was recorded during January-July 2009 from the same period in 2008. According to market research report China Automobile Sector to 2010 by RNCOS, this solid performance will enable passenger car sales to go beyond 11 Million Units in 2010.
During the first seven months of 2009, overall 7.2 Million vehicles were sold in the country, representing an increase of 23.4% from the same period in 2008. Particularly, in the first half of the current year, automobile sales surged 17.7% as compared to the previous year to 6.1 Million Units.
Recovery of the economy of China enabled the country to buck the trend of automobile sales prevailing in most of the countries across the world, which have been worst affected by the economic doom. As the economy of the country is regaining momentum and the consumer confidence is gradually picking up, the auto sector of China is on its way to grow upwards.
Moreover, government's efforts to promote the purchase of small cars have also been fuelling the sales of cars in the country. One of such efforts is the reduction in sales tax on vehicles having small engine. The country is also offering subsidy to buyers on replacing their old cars with new ones. For models of passenger cars with engine capacity of less than 1.6 Liters, the purchase tax has been slashed to 5%.
Besides this, weak automobile demand in the latter half of 2008, in wake of a destructive earthquake, has also contributed significantly in boosting the year-on-year growth rates in July 2009.
According to a Research Analyst at RNCOS, "The automobile market in China is poised to continue growing, might be at an even better pace, in the coming months. But even if the market encounters a marginal slowdown in growth rates in the second half of 2009, the sales figures are anticipated to remain strong."
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