While still facing the prospect of registration limits in major cities, China’s thriving auto market manifested once more in June, as the foreign brands continue their challenge on domestic carmakers.
According to the Passenger Car Association, the retail level of cars, multipurpose and sport utility vehicles jumped 14% to 1.47 million vehicles last month, with the six months figures up 11% to 9.09 million units.
“Automakers are focusing their product launches on the lower- and mid-end of the market,” said Harry Chen, a Shenzhen-based analyst at Guotai Junan Securities Co. Ltd. “When new products come into the market, it stimulates sales.”
The sales were driven by expanses of the foreign brands, which continue to base their global ambitions on the Chinese market and further dent the market share of the local automakers, by releasing more affordable models targeted at the numerous smaller cities in the country. The foreign automakers, like Gm with its Aveo introduction last month, or VW with the release of the Polo sedan at the end of May, seek to attract new buyers as the big cities could be soon closed down to new car sales due to pollution and traffic problems.
Data from the state-backed China Association of Automobile Manufacturers shows that local Chinese manufacturers in June only had a 21.5 market share in China, down 5.15 from the same period last year.