China: Jan car sales up 16.2 per cent year on year image

China Association of Automobile Manufacturers said on Friday that Chinese automakers shipped 16.2 percent more cars to dealers in January as they moved aggressively to replenish inventories that were nearly depleted after explosive sales in December.

The Chinese government has been offering tax incentives for new cars (waiver of sale tax, fuel efficiency rebates, and trade-in subsidies) but discontinued them at the end of 2010.

Analysts attributed the bigger-than-expected growth to strong consumer spending and surging industrial demand for cars as China’s economy continues to see blistering expansion.
General consumer spending is expected to remain strong,’ Xia Ping, a Shanghai-based analyst with securities firm Core Pacific-Yamaichi, told AFP.

However, the boom has worsened traffic problems in some major cities. Beijing launched a quota system to limit new car licences from Jan. 1. Only 240,000 new cars will be registered in the city this year, compared with 800,000 that took to the streets last year.

The monthly data were released about 10 days later than usual due to the Lunar New Year holiday earlier this month.