China's full-year auto sales seen to rise

China's full-year vehicle sales are expected to rise to 17.5 million units despite a recent industry-wide slowdown, the China Passenger Car Association forecast yesterday.

The revised number is about 500,000 more than earlier forecast and would reflect another 28 percent increase from last year, when China's vehicle market soared due to the central government's stimulus measures to boost car sales.

However, in June passenger car sales, including sedans, sport-utility vehicles, multi-purpose vehicles and minivans, grew by an annual 18.1 percent to 985,815 units, it said. The rise is the slowest over the past 14 months.

June's total sales were also 2.2 percent lower from May's, extending a decline for the fourth consecutive month on a monthly basis.

Rao Da, secretary-general of the association, blamed the floundering sales to a number of facts, including slower economic growth, labor unrest at Honda Motor Corp's Chinese supplier as well as floods in China's southern regions.

He expected July's sales to continue to slow due to the non-peak sales season and car makers are likely to offer big discounts.

But he also predicted as unlikely that the monthly sales in the second half of this year would see negative growth from a year earlier.

"China's extended subsidies for vehicle upgrade as well as the 3,000 yuan subsidies for fuel efficient vehicles may impact the market from July," he said. "By the end of this year, there will be another round of purchase fever as consumers rush to buy before incentives expire. The growing trend of the market is inevitable."