Chinese buying fewer domestic cars

BEIJING (AP):China's auto sales rose 11.3 per cent in the first two months of this year, but local brands suffered a decline in a sign of intense competition in the world's biggest auto market, an industry group reported last week.

Sales for the two-month period totalled 3.1 million vehicles, according to the China Association of Automobile Manufacturers (CAAM). Sales by domestic auto brands declined one per cent to 1.2 million vehicles. Sales data from January and February often are combined to screen out the impact of the Lunar New Year holiday, which falls at different times in those two months each year.

Overall sales are "better than early expectations", said Zhang Xin, an analyst at Guotai Jun'an Securities in Beijing.

buying pattern

Global automakers are spending heavily to develop models for Chinese tastes. That is squeezing fledgling domestic brands that lag in technology, as buyers who used to see them as entry-level purchases demand better quality. "Now, customers might ignore the transition part and go directly to buying better cars," said Zhang. "And they might have problems with selling the old Chinese-brand cars when they want to update."

Rapid overall sales growth has been steadily declining because of China's economic slowdown and curbs on ownership imposed in some cities in response to smog and traffic. This year's sales growth is forecast to decelerate from 15.7 per cent in 2013 to about eight to 10 per cent. Sales grew 17 per cent in December. Auto sales in February rose 29 per cent to 1.3 million vehicles, offsetting January's lacklustre seven per cent expansion before the holiday.

vehicle sales

Total vehicle sales, including trucks and buses, rose 10.7 per cent in the January - February period to 3.7 million, according to CAAM.

Earlier, General Motors Co said sales of GM-brand vehicles by the company and its Chinese partners rose 19.9 per cent in February over a year earlier to a monthly record of 257,770. Ford Motor Co said combined sales in January and February rose 73 per cent to 128,882 units, while February sales rose 67 per cent to 73,040.

Japanese automakers had strong February gains as they shook off the effects of tensions between Beijing and Tokyo over ownership of uninhabited islands in the East China Sea. Toyota Motor Co said total sales for January and February rose 126.4 per cent over a year ago to 137,500 vehicles, while those in February gained 143.1 per cent to 51,900. Nissan Motor Co said combined January - February sales rose 17.8 per cent to 167,100, while those in February gained 55.6 per cent to 71,900.

South Korea's Kia Motors Corp said February sales rose 18.2 per cent to 45,704 vehicles.