After months of reports about the slowing of auto sales in China, the country followed the lead of the U.S. enjoying a huge rush of October sales and netting a 13.3% increase over year-ago figures.
The jump to 1.9 million units comes after the government introduced cut in the sales tax on vehicles with engines with displacement of 1.6 liters and smaller to 5%, which is half of what it had been, according to the China Association of Automobile Manufacturers.
The big driver of sales last month, much like in the U.S., was sport-utilities. Sales were up 60.6% to just more than 622,000 vehicles. Sedan sales were up slightly – 0.2% – to just over 1 million units.
Another growth area for the country was Chinese brands, such as Great Wall Motor, whose sales rose 14% for the month, prior to now, had been pushed aside in favor of foreign makers.
Automakers – both Chinese and foreign – have struggled to find away to bolster sales in the country that has been counted on for strong results for the last five years.
There had been plenty of warnings that vehicle sales would slow this year as the government instituted new programs aimed at controlling China’s meteoric economic growth. Most expected sales to drop to a 7 to 8% increase in 2015; however, the drop was more severe: less than 6% until last month.
(BMW reports strong quarterly earnings, but warns of China slowdown. For more, Click Here.)
However, some analysts revised their initial predictions down to less than 2% after back-to-back declines in sales results during the summer.
Several global automakers cut prices to lure buyers into showrooms. The combined efforts worked as:
- GM sales rose 15%, including Buick’s had best month ever, rising 42%.
- Ford sales rose 7% over a year ago to 95,185 vehicles.
- Nissan sales rose 16.8% to 109,600 units.
- Toyota sales nearly doubled to 103,400 vehicles with year-to-date sales up 110%.
- BMW AG sales rose 2.3% to 384,176.
(Click Here to see how slowing China sales caused Honda to halt plans for new plant.)
“The recently announced government incentive for vehicle purchases helped boost buying sentiment starting in October,” Matt Tsien, GM’s China president said in a statement.
The move to spark sales was effective and the cut will remain in place into 2016; however, sales are well off their peak growth of 45% in 2009.
(Click Here for details about Ford’s $1.8 billion R&D investment plan in China.)
Sales of battery electric and plug-in hybrid passenger vehicles in October were up 850% and 200%, respectively, than a year ago, according to the Ministry of Industry and Information Technology. Total vehicle sales, including trucks and buses, rose 11.8% to 2.2 million units.