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China bucks trend with new record in car sales

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Original article: http://business.timesonline.co.uk/tol/busi...icle6067339.ece

Sales of vehicles in China hit a record last month, underlining the country’s rise in the market as carmakers in the US scramble to avoid bankruptcy.

Chinese people eager to leave behind the age of the bicycle bought 1.10 million vehicles in March, up some five per cent from the previous record of 1.06 million in March last year, data from the China Association of Automobile Manufacturers showed.

The number cemented China in its position as the world’s largest car market, outstripping even the US.

Sales have been buoyed by a desire among Chinese to have a car of their own – in many cases their first set of wheels ever – as well as by government tax cuts and rebates on small car purchases intended to lure buyers back into showrooms.

Growth in sales had slowed in 2008 to its lowest annual rate in more than a decade as the global financial crisis took its toll towards the end of the year, prompting many Chinese to keep their wallets shut tight in case of more problems ahead. However, the government support measures introduced in February have spurred the market.

Yi Junfeng, an industry analyst with Changjiang Securities, said: "Few had expected such an explosive growth for the month. I certainly didn't as the economy had not shown clear signs of full recovery. It seems that the tax incentives for small cars and subsidies are really effective and the 10 percent annual growth target set by the government is achievable."

Chery Automobile Co, maker of the best-selling compact car, the QQ, sold more than 35,000 cars in March, hitting its second monthly record this year.

Foreign manufacturers also benefited. Ford Motor expects to grow faster than the overall China market this year, banking in part on policy support to lift sales of its new Fiesta small car rolled out last month.

Regardless of its miseries back home, General Motors said it sold 137,004 vehicles in China in March, up 24.6 percent from a year earlier. Its minivehicle joint venture, SAIC-GM-Wuling, saw sales surge 38 percent to 90,784 vehicles. Kevin Wale, president and managing director of the GM China Group, attributed the strong showing to a wide product lineup, and forecast that the company will double its sales, to more than 2 million a year, by 2014.

Overall passenger car sales hit a monthly high of 772,400 units in March, up 10.26 percent from a year earlier, and a rise of 27.2 percent from February.

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