SUVs Demand Drives March's Increase In China Auto Sales

Apr 13, 2016 04:34 AM EDT | Victor Thomson


An industry group announced on Tuesday, April 12, that the strong demand for sport utility vehicles and the impact of a tax cut led to a boost of Chinese auto sales in March by nearly 10 percent. However, dealers continued to be pressured by high inventories.

The China Association of Automobile Manufacturers announced that 2.06 million vehicles were sold in March on the Chinese auto market. reports that the volume of sales is 9.8 percent higher comparing to March 2015. 
Minivan sales rose by nearly 18 percent and the strong demand for SUVs increased by nearly half. Total vehicle sales on the Chinese auto market, including buses and trucks, increased to 2.4 million (by 8.8 percent).

While the total vehicle sales are on the rise, the Chinese auto industry group said that sedan sales suffered a 3.3 percent year-over-year decline. This loss in sedan sales is extending a 12 percent decline in the first two months of the year, a sales period affected traditionally by the Chinese Lunar New Year.

Since the year 2009, when China's auto sales growth peaked at 45 percent, the auto market has been cooling. However, China remains the largest market for global automakers.

Last year, auto sales in China totaled 21.1 million units. But last summer an unexpectedly sharp contraction affected automakers. In September, Beijing reacted by cutting taxes on cars with small engines and sales rebounded.

For this year, auto market analysts expect that the demand for SUVs will remain solid in China. The lower fuel prices will continue to encourage consumers to trade up from the compact sedan market. According to , Felix Su, an analyst with researcher IHSAutomotive, said that Chinese consumers appreciate SUVs' high seating positions, dynamic design and affordability.

The best selling SUVs on the Chinese auto market are domestic models such as Guangzhou Automobile Group Co.'s GS4 and Great Wall Motor Co.'s Haval 6. Both models have a retail price under $15,400.

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