Following a negative performance in June and July, the Chinese auto sales have managed to return to a modest rise last month after automakers and dealers swelled the market with discounts and other incentives.
After years of steady increases and record profits, the world’s largest auto market has faltered this year because of the slowing economy – tipped to grow at the lowest level in more than two decades – and the deep rout in Chinese stocks, taking consumer confidence lower than expected. According to the China Passenger Car Association, retail sales of cars, SUVs and multipurpose vehicles soared just 0.6 percent to 1.44 million units last month. Following declines in the previous two months, deliveries in August jumped 11 percent compared to the preceding month.
“The discounts offered are kicking in,” comments Yao Wei, a Shanghai-based analyst at Bocom International Securities Ltd. “They helped to ease pressure on dealers and pass on savings to consumers, so there’s an effect on August sales.”
Automakers and their dealers have reverted to numerous incentives, including subsidized insurance, zero-down financing, loans with little or no interest and increased trade-in prices as they sought to bring back shoppers. And the efforts were augmented after the major stock disaster – the worst rout since 1996 – because consumers would have less cash at hand to purchase cars.
Passenger cars deliveries continued to slide – by 13 percent – and SUVs instead jumped 55 percent in August, according to figures. The industry group announced that after the first eight months of the year the passenger vehicle sales have soared 6.3 percent to 12.6 million autos.