Total vehicle sales in China rose 8.14 percent in the first half of 2016, according to the China Association of Automobile Manufacturers (CAAM), massively ahead of the predicted 6 percent increase for the full year; halting fears of a slowdown.
Buoyed by the positive momentum, the industry hopes the rebound will be sustained for the rest of the year. “People are cautiously optimistic”, said Godfrey Tsang, a consultant and former vice president for Lexus China. Passenger cars, which constitute the majority of China’s vehicle sales, sold 9.23 percent more in the first half of 2016 according to the data released by CAAM. Zou Tianlong, security analyst at UBS securities, said the achievement was partly due to a relatively small base of sales to compare during the same time of last year. “The sales growth will gain higher momentum in the second half of this year, and then wane off”.
China’s strong first half performance this year was boosted by strong demand for sport utility vehicles (SUVs), with unit sales increasing 40 per cent year on year. Such strong SUV growth is unlikely to continue in the second half, according to Yale Zhang, director of Automotive Foresight, a research group. “SUV sales in Q4 last year were very high in part due to a large number of models released by domestic auto manufacturers but few have new models to bring to market in Q3 and Q4 this year,” he said.
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