The largest auto market in the world has been delivering a mixed performance this year, impacted by the lower economic gain and the recent stock market rout, with a feeble auto sales growth in September.
Actually, SUV sales were the only ones to increase last month making the segment the passenger-vehicle category to see a positive move, showcasing the massive consumer preference switch away from the traditional segments such as sedans. Sport utility vehicle deliveries grew a massive 60 percent to 548,508 autos last month, while the traditional sedan sales dropped 11 percent and the more practical minivans also slid by 5 percent. Light-commercial vehicles, which are used both as mini-goods carriers but also for passenger transport, plunged 36 percent, according to sales figures announced by the China Passenger Car Association. With the weak economic outlook and a grim performance by the auto market in two consecutive months of negative sales, the state-backed auto association successfully lobbied the state for incentives – at the end of September the government announced the purchase tax for about 64 percent of the passenger car market was reduced by 50 percent.
This will include an added bonus for smaller SUVs, with General Motors – among the biggest foreign automakers in China – forecasting SUV, minivan and luxury vehicles would make up 80 percent of the growth trend for the years to come. “The demand has attracted almost all carmakers to invest in the segment and introduce new models, especially entry-level SUVs,” comments John Zeng, a Shanghai-based analyst at industry researcher LMC Automotive.