Vehicle purchases hitting top gear

Automakers post double-digit growth during first six months of the year

Passenger-vehicle sales in China continued their momentum with double-digit growth numbers during the first six months of the year on the back of stable economic growth, a report said on Tuesday.

According to data provided by the China Passenger Car Association, nearly 1.47 million sport utility vehicles, multipurpose vehicles and minivans were sold in China in June, a 14 percent growth from the corresponding period a year ago. The healthy growth numbers will also propel more automakers to take the sustainable growth path, the association said.

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Buoyed by the healthy June numbers, passenger vehicle sales during the first six months surpassed 9 million units, a 11.4 percent year-on-year growth. Juxtaposed with the 13.87 percent annual growth in 2013, the numbers are a clear indication that the stagnancy that was prevalent in the market during 2011 and 2012 has disappeared.

The healthy first-half numbers also surpassed the industry expectations of growth between 8 and 10 percent.

"It's a signal that China's passenger vehicle sales have entered a period of stable, sustainable development and the market will maintain similar growth in the coming months," said Rao Da, secretary-general of the China Passenger Car Association. Rao said that if one were to exclude the negative impact from the FIFA World Cup and the Dragon Boat Festival without free toll policy benefits, the sales in June would have been much higher.

Moreover, "as China's real estate industry has already weakened due to the government efforts to maintain stable GDP growth, it is unlikely that there would be any curbs that are detrimental to the growth of the automobile industry," said Rao. "Thus, automakers can sit back and relax in the second half."

Rao even predicted a 15 percent year-on-year growth in July, one of the worst months for auto sales in China, as the hot summer forces many companies to suspend production for several days due to safety considerations.