China auto sales up 6.7 percent in July from a year earlier image

Sales of automobiles in China slowed in July, a month after weak sales growth prompted the semi-official China Association of Automobile Manufacturers, an industry group, to cut its annual national sales forecast.

However, car sales in China climbed 6.7 percent in July from a year earlier.

After two consecutive years of breakneck expansion, China’s auto market is returning to a subdued growth pattern this year, with sales in May declining from their year-earlier level for the first time in more than two years.

A new localized policy to limit car purchases launched on July 11 in Guiyang, the capital ofSouthwest China’s Guizhou province, has added to the pressure on the domestic vehiclemarket, which has been hit this year by the expiry of the government’s two-year incentivesscheme and the March 11 earthquake in Japan.

“Autumn has always been the best auto-selling season. Demand will not jump up as sharply as it used to, but a mild rebound is quite likely,” said Sheng Ye, associate research director at industry consultancy Ipsos’ Greater China region.

According to the reports, in July, a total of 1.01 million sedans, sports utility vehicles and multi-purpose vehicles were sold. For the first seven months, 8.12 million vehicles were sold, up 5.9 percent from a year ago.

Second quarter net sales were $82.5 million, compared with $85.1 million for the second quarter of 2010. The sales decline was mainly attributable to lower automotive vehicle sales in China and a reduction in the average selling price of the Company’s products.

“Reflecting current conditions, management has lowered its guidance and now expects annual revenues to increase by 5% to 10% for 2011,” CAAS said.