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2012-09-12 07:12

SALES SLOWDOWN: Less metal is moving out of car showrooms in China as the sales bubble there starts to leak.

BEIJING, China - China's auto sales growth tumbled to 3.7% in August, further deepening that country's an economic slowdown.

Customers bought 1.23-million cars, according to a government-authorised industry group, the China Association of Auto Manufacturers. The lower growth extended a steady decline from July's 11% rate and June's 15.8%.


The slowdown is a blow to a global auto industry that is looking to China, the biggest market by number of vehicles sold, to drive sales growth amid weak demand in US and European markets.

General Motors, Ford and other global brands say their sales are growing faster than the overall market. That is squeezing smaller Chinese brands.

Growth in total vehicle sales also slowed in August, CAAM said. Sales rose 7.8% to 1.5-million units, down from July's 8%.

Sales were unexpectedly strong and might have received a temporary boost from sale prices, said Zhang Xin, an industry analyst at Guotai Jun'an Securities in Beijing. "I think the main reason is 'On Sale,' especially led by the famous and luxury brands," Zhang said.

Zhang said buyers also might have been prompted to move up purchases to beat the imposition of curbs on new registrations in a growing number of cities to fight smog and traffic.


China overtook the US as the biggest auto market in 2009 when sales jumped 45% from the previous year, boosted by sales-tax cuts and other incentives. That rapid growth prompted many automakers to invest in additional factories, raising the threat of a glut of unneeded production capacity after sales growth unexpectedly plunged.

GM said August sales of its cars rose 7.3% from a year earlier to 220 996, a record for that month.

Sales of Mercedes-Benz, Smart, AMG and Maybach cars in China rose 5% to 14 840, Nissan by 0.6% to 95 200 while sales by its joint venture with local partner Dongfeng Motor rose 1.8% to 65 100.

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