China passes US auto market in first-half sales

BEIJING - China surpassed the United States as the world's biggest auto market for the first half of 2009 after June sales soared 36.5 percent from a year earlier, according to data reported Thursday.

China's vehicle sales in June rose to 1.14 million, the second-highest month to date after April's 1.15 million units, the China Association of Automobile Manufacturers said. Passenger car sales hit a monthly record of 872,900 units.

Total sales for the first half of the year rose to 6.1 million, up 17.7 percent from a year earlier, the industry group said. That outpaced the United States, where passenger car sales in the same period plunged to 4.8 million amid an economic slump.

China's auto sales weakened in late 2008 as the global financial crisis hit but rebounded after Beijing launched a stimulus package with sales tax cuts, subsidies to trade in older cars and other incentives.

Global automakers are looking to China to help drive revenues as they struggle with falling demand in North American and other markets.

"It was really hard for our auto industry to achieve such a proud result against a backdrop of general gloom in the international auto industry," the association said in a statement.

China, with 1.3 billion people, has long been expected to overtake the United States as the biggest vehicle market. But the U.S. economic slump hastened that process by depressing American sales while China surged ahead.

China surpassed U.S. auto sales for five of the past six months. The United States pulled ahead temporarily in May before dropping back with 859,847 cars sold in June.

Analysts expect China's sales this year to top 10 million vehicles, while one Chinese industry group says the total could exceed 11 million.

By contrast, analysts say U.S. sales in June, when adjusted for seasonal variations and multiplied to produce an annual rate, were the equivalent of 9.7 million vehicles for 2009. That is down sharply from the 2007 peak of 16 million vehicles sold.

Commercial vehicles such as trucks and buses are a bigger share of sales in China than in the United States or Japan. Some observes say that makes comparing figures from the three markets misleading.

In 2008, Chinese sales included 6.8 million passenger cars and 2.6 million commercial vehicles, according to the CAAM.

General Motors Corp. said its China sales in the first half soared 38 percent from a year earlier, while GM's U.S. operations were forced to obtain government aid and reorganize under bankruptcy court protection.

Ford Motor Co. said its first-half China sales were up 14 percent.

"The government took a series of policies in the first half of the year to promote the development of the auto industry," the industry association said. "Auto sales and production pulled out of their trough to show a good development trend."

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On the Net:

China Association of Automobile Manufacturers (in Chinese): http://www.caam.org.cn

CAAM statistics page (in Chinese): http://www.auto-stats.org.cn

(jrm)

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