China's auto sales this year may hit 17.5 mln units

Despite a recent market slowdown, China's full-year vehicle sales in 2010 are expected to reach 17.5 million units, with demand to be boosted government's subsidies, media reported today, citing an industry association.

China's vehicle sales in the first half of the year surged 30.45 percent from a year earlier to 7.18 million units, the China Automotive Technology & Research Center (CATRC) said earlier this month. First-half sales of passenger cars rose 25.6 percent to 5.42 million.

Last month, sales of passenger cars, including sedans, SUVs, MPVs and minivans, grew by 18.1 from a year earlier to 985,815 units, the China Passenger Car Association said. The sales growth in June is the slowest over the past 14 months. June's sales were also 2.2 percent lower from May's.

The monthly decline in auto sales for the fourth consecutive month is blamed on a few factors, including slower economic growth, labor unrest at Honda Motor's supplier and floods in southern China, said Rao Da, secretary-general of the association.

The extended subsidies for auto trade-in and the 3,000 yuan subsidies for clean vehicles are expected to boost the market demand in the second half. "By the end of this year, consumers may rush to buy cars before incentives expire," Rao said.

After becoming the world's largest auto market last year by selling 13.6 million vehicles (up 46 percent), China continued to lead the US in total auto sales in the first half of this year, when US deliveries rose to 5.6 million.