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China - Domestic Automobile Sales Up 36.5% in June
Jul 27, 2009

Sales of domestically manufactured automobiles in China surpassed the 1.1 Million mark in June for the fourth time in succession, backed by the government's various stimulus measures.

According to the statement of the China Association of Automobile Manufacturers (CAAM), sales of domestically manufactured automobiles in China surpassed 1.14 Million Units in June 2009, increasing 36.48% from June 2008 and marking the fourth successive month of sales exceeding 1.1 Million Units, reported China Daily.

Sales of passenger cars struck a monthly high of 872,900 Units. Moreover, the total sales recorded for the month was the second highest till date following 1.15 Million vehicles sold in April. According to a research report "China Automobile Sector to 2010" by RNCOS, considering the past performance, the sales of passenger cars is expected to cross the mark of 11 Million Units in 2010.

As per CAAM, sales of locally manufactured automobiles in China were recorded at 6.099 Million Units during January-June 2009, 17.69% up from the corresponding period in 2008. The country produced 5.99 Million vehicles during the first half of the current year, which is 15.22% on a year-on-year basis. Particularly, the production of passenger vehicles surged 20.96% year-on-year to 4.42 Million Units during the same period. In fact, both the automobile production and sales figures in the first half of 2009 have successfully set a new half-yearly record.

The growth witnessed in China's automobile sales is accredited to the series of government's stimulus initiatives to spur the domestic consumption. It is noted that in January 2009, China reduced tax on the purchase of passenger cars to half, i.e. to 5%. This benefit, for the car models having engine displacement of under 1.6 Liters, was aimed at boosting the consumption of domestically manufactured automobiles.

Moreover, an economic package of 4 Trillion Yuan ($585 Billion) assisted China to surpass the United States and emerge as the world's leading automobile market in 2009. The stimulus aid also boosted the sales of companies ranging from General Motors Corp. to Alcoa Inc.

According to a Research Analyst at RNCOS, "China appears to be upcoming up from the downward slide. Increasing auto sales indicate that the country's economy might be recovering from a downturn. The growth in automobile sales is expected to continue in the latter half of 2009 also, with the strong demand for vehicles continuing in China after the government's stimulus incentives."

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