China’s passenger-car sales rose 4.5 percent in March, beating analyst estimates, as dealerships increased discounts to attract buyers amid record fuel prices.
Deliveries of passenger automobiles, including multipurpose and sport-utility vehicles, climbed to 1.4 million units last month, the China Association of Automobile Manufacturers said today in a statement. Sales were projected to increase 3.9 percent, according to the average estimate of a Bloomberg News survey of eight analysts.
The rebound may ease concern that a slump in auto sales in January and February, the worst two-month start to a year since 2005, will deepen and threaten foreign automakers from General Motors Co. (GM:US) to Volkswagen AG (VOW) that depend on the world’s biggest vehicle market to help make up for declining demand in Europe. The gain in March was insufficient to keep first-quarter deliveries from falling for the first time since 2005.
“China is holding up, but it’s still suffering from a hangover of the boom in 2009 and 2010,” Ashvin Chotai, London- based managing director for Intelligence Automotive Asia, said in a phone interview. “We can expect a fairly sluggish 2012.”
Auto demand rose 32 percent in 2010 after the government introduced subsidies and rebates to encourage buying, before slowing to 2.5 percent last year after the incentives lapsed.
China’s vehicle sales this year will probably miss their 8 percent growth forecast as the slowing economy and rising fuel costs curb buying, Gu Xianghua, deputy secretary general of state-backed CAAM, said on March 20.
The association will “observe for another quarter” before deciding whether to adjust the full-year forecast, Dong Yang, an official with the industry group, said today in Beijing.
Prices of locally produced cars fell 1.7 percent in March from a year earlier, a third consecutive decline, according to the National Development and Reform Commission’s pricing center, which tracked data from 36 major cities.
The timing of a three-day national holiday at the start of April also helped spur some buying, said Han Weiqi, analyst at CSC International Holdings (CSCIW1). Chinese consumers prefer to buy cars prior to long public holidays in order to use them over the vacation period, Han said.
Total vehicle deliveries in March, including commercial vehicles, rose 1 percent to 1.83 million units, the industry association said today. Sales of sport-utility vehicles jumped 32 percent, sedan sales rose 13 percent, while minivan sales fell 1.1 percent, according to today’s statement.
For the January-March period, passenger-car sales fell 1.3 percent, the first decline since the first quarter of 2005 when deliveries dropped 3.2 percent, CAAM data show.
GM, the largest foreign automaker in China, said on April 5 that deliveries in the nation rose 11 percent to 257,944 vehicles last month. The Detroit-based company set a quarterly record in the first quarter of the year, led by demand for vehicles including the Buick Excelle and Chevrolet New Sail. Toyota’s China March sales rose 2.2 percent to 86,000 units, Niu Yu, the Japanese company’s spokesman, said on April 9.
Honda reported April 9 a 12 percent gain in sales in March. Luxury carmakers Bayerische Motoren Werke AG (BMW) and Audi AG (NSU) -- offering the biggest markdowns on their high-end models since at least 2009, according to pricing guide cheshi.com -- also saw sales surge.
Audi’s March sales in China including Hong Kong rose 37 percent. BMW boosted mainland China sales 41 percent last month.
Even so, some analysts predict an increase in retail fuel prices last month will weigh on car purchases in coming months. China, the world’s second-largest oil consumer, raised prices of gasoline by 7 percent and for diesel by 7.8 percent on March 20, the biggest increases in more than two years, according to data compiled by Bloomberg.
“When you look at historical data, every time fuel prices are increased, it typically impacts sales in the quarter after the rise,” said John Zeng, an analyst at LMC Automotive in Shanghai.
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