October sales figures show slowing growth

A worker assembles a new car at a production line of FAW-Volkswagen in Changchun, Jilin province.[Photo provided to China Daily]

SUVs lift lackluster passenger sector, as premium and new energy see surge

Car sales in China grew 2 percent year-on-year last month, continuing the momentum seen in September, according to statistics from the China Association of Automobile Manufacturers released on Friday.

A total of 2.7 million cars were sold in the month, roughly the same as in September. In the first 10 months of the year, 22.93 million cars were sold, up 4.1 percent from the same period last year.

Although a decent figure if put in the global context, the growth rate is 9.7 percentage points lower than the year-on-year growth figure for January to October 2016.

This made it even more unlikely for 2017 car sales to reach the 5 percent estimate the association made at the start of the year.

Fueled by a favorable tax policy, sales spiked in the last months of 2016, which would be extremely difficult to match this year.

Passenger cars, which account for the absolute majority of total car sales, saw even slower growth than the overall figure.

In October, such sales grew 0.4 percent year-on-year to 2.35 million vehicles.

That brought sales in the first 10 months to 19.5 million vehicles, up 2.1 percent.

As was seen in previous months, all models but SUVs fell during the period.

From January to October, sedans dipped 1.9 percent, multipurpose vehicles fell 17.2 percent and crossovers slumped 25.4 percent.

SUVs rose 15.8 percent in the period, but their growth is also gradually slowing down.

Despite the lackluster performance of the passenger car segment as a whole, premium cars are surging against the tide.

Mercedes-Benz sold 46,016 cars in October in China, posting a double-digit growth rate, according to the German carmaker.

Since the beginning of the year, its China sales soared almost 28 percent to 488,915 vehicles, more than its total sales in 2016. Jaguar Land Rover sold 12,321 cars in the country last month, up 12 percent year-on-year.

It was the 22nd consecutive month that the British premium carmaker has seen growth in its largest market. Its China sales from January to October grew 25 percent to 116,998 vehicles, almost equal to its total sales last year.

New energy cars soar

Growing even faster are new energy cars, fueled by China's slew of favorable policies, carmakers' enthusiasm and people's rising awareness.

A total of 91,000 such cars were sold in October, more than double the sales in the same month last year.

In the first 10 months of the year, 490,000 new energy vehicles had been sold, soaring more than 45 percent year-on-year.

The association expects 2017 sales to reach 700,000 vehicles, as the segment is picking up speed.

China is already the world's largest electric car market. With 1 million such cars already on its roads by the end of 2016, its potential is attracting carmakers to offer more options.

Last week, Ford signed a deal with Zotye to produce electric cars in China. The move came after Volkswagen joined hands with JAC Motors to do the same in May.

Tesla has confirmed that it is in talks with the Shanghai government to build a plant in the region, with localization expected to start around 2020.

As China is cutting its subsidies, it is coming up with other stimuli.

On Wednesday, financial regulators announced new loan policies for car purchases, allowing buyers of new energy vehicles to borrow a larger portion of the purchase price.

Starting in 2018, they can borrow up to 85 percent of the cost from banks, according to the People's Bank of China and the China Banking Regulatory Commission.

The maximum loan for cars using traditional fuel is set at 80 percent.

Commercial cars, including buses and trucks, also reported decent sales performance.

In October, more than 350,000 vehicles were sold, almost 15 percent rise from the same month last year, according to the China Association of Automobile Manufacturers.

That brought sales in the first 10 months to 3.42 million, up more than 17 percent year-on-year.