From Automotive News China
Beijing- China's light vehicle sales declined 4.4 percent year-on-year to 2 374 000 units in the first two months of this year, according to figures released Friday by China Association of Automobile Manufacturers.
Sales of passenger cars dropped 4.5 percent year-on-year to 1 626 000 units, while microvan sales tumbled 12.5 percent to 404 200 units.
Only the SUV, MPV and luxury segments showed much growth. SUV sales rose 10.1 percent to 265 300 units, while MPV sales rose 2.3 percent to 78 500 units.
In the luxury segment, Audi AG, BMW AG and Daimler AG each reported strong sales for the period.
The industry's lacklustre sales offer more evidence that both retail and commercial demand for vehicles in China remains soft. In January, CAAM (China Association of Automobile Manufacturers) had predicted that light-vehicle sales would rise 9.5 percent this year. But some observers are more pessimistic.
Automakers will find "big difficulties" delivering as many cars in China as CAAM projected for this year, Minister of Industry and Information Technology Miao Wei told reporters in Beijing Thursday.
Domestic Chinese brands were hit hard by weak sales in the first two months, with sales plunging 11.5 percent year-on-year to 1,014,200 units. As a result, their share of the domestic light vehicle market dropped 3.5 percentage points from a year earlier to 42.7 percent.
The association didn't release market share figures for global brands by brand origin. But so far, General Motors, Volkswagen AG, and the three German luxury brands - Audi, BMW and Mercedes-Benz all reported relatively strong sales growth in China for the first two months.
February car sales in China jumped 26.5 percent year-on-year to 1.2 million units, but that increase was affected by the timing of the Chinese Lunar New Year, which was held in January this year.
China's Spring Festival holidays marking the lunar new year are the country's most important holiday period, and most companies shut down for about a week so workers can return to their hometowns to celebrate with relatives.
That's why industry analysts typically study two-month sales to gauge the state of the industry.
"The first two months aren't that impressive. But we can't jump to the conclusion that demand is starting to fall off," said Sheng Ye, associate research director at industry consultancy Ipsos' Greater China region.
"There is still a lot of untapped potential in third- or fourth-tier cities where many people have yet to buy the first car of their life," Ye said.
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